Paper Topic:

accounting

Financial Accounting

Introduction

Financial statements are the end-products of financial accounting process . In other words they are the outcome of the summarizing process of accounting processes of an entity (Berges 2004 . These statements are prepared by business organizations to communicate information to various interested parties such as investors , creditors , managers , banks government and financial analysts , to depict their financial position This covers the different types of financial statements , mainly- income statement , position statement , their objectives , major stakeholders of these statements , analysis of the statements and the different ratios used

by different stakeholders from the financial statements to take their individual financial decisions

Types of Financial Statements

Financial Statements are the package of statements , which provides detailed information about the financial position of a concern . These statements are broadly divided into four namely Balance Sheet , Income Statement , Statement of Retained Earnings , and Cash Flow Statement (Costales 1993 . Out of these statements , Income Statement and Balance sheet are the most important ones prepared by big as well as small concerns . These two statements are prepared at the end of a given period of time to depict the profitability and financial position of the concern

Objectives of Financial Statements

The main purposes of preparing financial statements are as follows

To communicate information about the financial position of the business concern to various interested parties

To present true and fair view of the business concern

To reveal the profitability and financial position of the business concern

To provide information about the financial obligations...

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