FINANCIAL STATEMENTS

Financial Statements

Financial Statements

Accounting

Accounting is the art of organizing, maintaining, recording, and analyzing financial activities. Accounting is generally known as the “language of business.” The accountant translates this accounting information into meaningful terms that are used b interested parties. They also provide information that helps you produce goods or services as efficiently as possible to maximize profits and keep costs low. Every organization, whether organized for profit, nonprofit, charitable, religious, or governmental purposes require accountants.

Financial Statements

Financial statements are the most widely used and the most comprehensive way of communicating financial information to users of the information provided on the reports. Different users of financial statements have different informational needs. General purpose financial statements have been developed to meet the needs of the users of financial statements, primarily the needs of investors and creditors.

The information provided by financial statements is primarily financial in nature quantified and expressed in units of money. The information presented pertains to individual business enterprises, government entities, and other accounting entities, and not to industries or to members of society as consumers. The information provided on the statements is often approximations, rather than exact, measures. The measures involve estimates, classifications, summarizations, judgments, and allocations. The information provided generally reflects the financial effects of transactions and events that have already happened. The information provided involves a cost to provide and use; generally the benefits of information provided should be expected to at least equal the cost involved.

Users of Financial Statements

Well all decision-makers need different kinds of information to make their decisions. The more complex the decision, the more accurate the information must be. In the world of business, Financial Statements plays an important role in these various decision-making processes.

Individuals like us use financial information all the time to make such decisions as:

Investing in the stock market

Applying for ...