9 CHAPTER

Financial Statements

MEANING OF FINANCIAL STATEMENTS

Basically, Financial Statements are organised summaries of detailed information about the financial position and performance of an enterprise. Traditionally, the term ‘Financial Statements’ is used to denote only two basic statements which are as under:

  1. Balance Sheet (or Position Statement) which shows the financial position of an enterprise at a particular point of time.
  2. Trading and Profit and Loss Account (or Income Statement) which shows the financial performance of business operations during an accounting period.

Now a days, in addition to the aforesaid two basic financial statements, a Statement of Retained Earnings and a Cash Flow Statement and Value Added Statement are also ...

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