Types of Financial Statements
There are different types of financial statements. Financial statements, are required to be audited by authentic, efficient audit firms to avoid manipulation of numbers. Statements are usually audited by the accounting firms after a thorough study of the company records. The accounting and the audit firms make sure that the company is obeying and operating as per norms laid down by the Generally Accepted Accounting Principles or GAAP.
Basically, there are four different types of financial statements. The different types of financial statements indicate the different activities occurring in a particular business house.
- Balance Sheet
- Income statement
- Statement of retained earnings
- Statement of cash flow or Cash flow statement
Balance Sheet:The balance sheet provides an insight into the financial status of a company at a particular time. The balance sheet, type of financial statement is different in comparison to the other types of financial statements. Other financial statements are prepared by taking into account the financial health of the company over a considerable span of time.
Income Statement:Also known as the P&L statement or the Profit And Loss Statement. This statement, ascertains the profit and loss of any business. This can be again of two types:
- Single Step Income Statement
- Multi Step Income Statement