A financial statement is a formal record of the financial activities of a business, person, or other entity.
The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities, equity, income and expenses are directly related to an organization's financial position.
The standard statements prepared are the income statement or P&L, the balance sheet, and the cash flow statement.
Financial reporting may be prepared monthly, quarterly and annually and shows the ending balances for asset, liability, capital and expense accounts through a specific period of time.
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