Financial Statements of Companies

Financial Statements of Companies

Financial Statements are those statements which shows the financial position and activities of a business or company

(financial statements are prepared at the end of the financial year)

Financial Statement includes:

(i)    a Balance Sheet as at the end of the financial year (which shows the Liabilities and Assets of the companies)

(ii)   a Profit and Loss Account, or in the case of a company carrying on any activity not for profit, an Income and Expenditure Account for the financial year (which shows the income earned and expenses incurred during the financial year)

(iii)  Cash Flow Statement for the financial year. (it shows only cash transactions which includes inflow and outflow of cash)

      

Balance Sheet shows the Assets and Liabilities, Owners equity of the company.

Profit and Loss Account shows the Income and Expenditure of the company.
Cash flow statement shows the inflow and outflow of cash of the company.