Financial Statements

 

Financial Statements

    Financial statements are extracts from the accounting system. The typical set of financial statements include the following:

1. Balance Sheet
2. Income Statement
3. Statement of Changes in Financial Position
4. Notes to the Accounts

Balance Sheet

    

    It is a sheet with two sections. In one section balances of assets and in the other section liabilities and owners' equity are enlisted on a specified date. It shows the financial position of the organization on a particular date. It is also called Statement of Financial Position.

Income Statement

    

   This statement shows revenues and expenses for a specific period e.g, normally a year. It shows the results of operations of an entity in terms of profit or loss. It is also known as the Statement of Operations.

Statement of Changes in Financial Positions

    This statement shows the sources and uses of financial resources during a specific period.

    

Notes to the Accounts

    

    Notes to the accounts provide a detailed explanation of each significant item in financial statements. They form integral parts of financial statements.

Format of Balance Sheet