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Its purpose is to convey an understanding of some financial aspects of a business firm.

Financial statement meaning in accounting. Meaning of financial statements. Presents the assets liabilities and equity of the entity as of the reporting date. Thus the information presented is as of a specific point in time.

A financial statement is a collection of data organized according to logical and consistent accounting procedures. The three basic financial statements are the 1 balance sheet which shows firms assets liabilities and net worth on a stated date. The four basic financial statements.

A general purpose set of financial statements usually includes a balance sheet income statements statement of owners equity and statement of cash flows. The report format is structured so that the total of all assets equals the total of all liabilities and equity known as the accounting equation. 2 income statement also called profit loss account.

The balance sheet reports information as of a date a point in time. It may show a position at a moment in time as in the case of a balance sheet. Includes explanations of various activities additional detail on some accounts and other items as mandated by the applicable accounting framework such as gaap or ifrs.

Summary that shows how a firm has used the funds entrusted to it by its stockholders shareholders and lenders and what is its current financial position.

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