Financial statements
From the Simple English Wikipedia, the free encyclopedia that anyone can change
In business, a financial statement is an organized document that includes financial information, like income and transactions, of a person, company, government, or organization. They are used by these people and organizations to make decisions on the subject (the person or organization who the financial statement is about), like to invest in a company.
Contents |
[change] Basic financial statements
A financial statement can be written in many forms, but in most countries there are four (4) basic financial statements which are standard. They are:
[change] Balance sheet
A balance sheet is a financial statement that includes everything the subject owns (called assets and equity) and owes (called liability or debt). For a person, an asset may be their house or car, and their liability may be their mortgage and credit cards.
[change] Income statement
An income statement is a financial statement that includes the subject's income, expenses and profit. This is also known as a profit and loss account.
[change] Owner's equity
A statement of owner's equity is a financial statement that includes what part of the subject belongs to the owner, such as the amount of a company that belongs to the investor.
[change] Cash flows
A statement of cash flows is a financial statement that includes the sources and uses of the subject's cash.
