3 Main Types of Financial Statements. Revenue and expenses, for example, are the components of the income statement. Financial Statements are the reports that provide the detail of the entity’s financial information including assets, liabilities, equities, incomes and expenses, shareholders’ contribution, cash flow, and other related information. Copyright ©2020 Globalinfo247.com. It is also known as the Statement of Financial Position or Statement of Financial Condition or Position Statement. The revenues that present in the income statements are the revenues from both cash sales and credit sales. The cash flow statement is one of the Financial Statements that show the movement of the entity’s cash during the period. 1959 Words 8 Pages. In conclusion, if the users want to see how much the entity makes sales, how much are the expenses incurred and how much is the profit or loss during the period, then income statement is the statement that the user should be looking for. In nutshell, Balanc… The statement of Shareholder's Equity (mentioned above) reflects the movement of equity for an entity over a particular period. Current Assets refer to short term assets including cash on hand, petty cash, raw materials, work in progress, finished goods, prepayments, and a similar kind that convert and consume within 12 months from the reporting date. Income Statement, also known as the Profit and Loss Statement, reports the company’s financial... 3. What are the notes to the financial statements? Financial statement fraud is usually committed with the intention of making financial gains, such as by using the false information to increase the value of the company's stock. Four Types of Financial Statements 1. They are increasing in debit and increase in credit. Fortunately, it’s relatively simple to keep your finances in order. Basically, if the income statement and balance sheet are correctly prepared, the statement of change in equity would be corrected too. Read Also: What is the Meaning of Business Finance. 4 Types of Accounting Financial Statements (with Templates) Financial statements are records that show the detail of an entity’s financial info including liabilities, assets, income, equity, expenses, cash flow, and shareholders’ contribution among other related information. Income Statement is sometimes called the statement of financial performance because this statement lets the users assess and measure the financial performance of an entity from period to period of the same entity or with competitors. The literal Bottom Line of the statement displays the company’s net earnings or losses. In this article, we will discuss all of those completed set financial statements. But if you're looking for investors for your business, or want to apply for credit, you'll find that four types of financial statements—the balance sheet, the income statement, the cash flow statement, and the statement of owner's equity—can be crucial in helping you meet your financing goals. Financial statements are used by different stakeholders including entity management, shareholders, investors, staff, majors customers, majors suppliers, government authority, stock exchanges, and other related stakeholders. Guide to Financial Statement Analysis. They are ranking from operating expenses like salary expenses, utilities, depreciation, transportation, and training expenses to tax expenses and interest expenses. Among the five elements of financial statements, assets, liabilities and owner’s equity can be found in the balance sheet while revenues and expenses … Notify me of follow-up comments by email. 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