A lender is most interested in a business generating a sufficient profit to pay for interest expenses and a return of the loaned amount. It is the process of reviewing and investigating any aspect of a business whether financial or nonfinancial. In its broadest theoretical sense economic condition is the firms ability to continue operating and thus is based on both earning power and solvency. These decisions may involve buying.

Let us make in-depth study of the meaning objectives and limitations of financial statement. It lists the total revenues and expenses that occurred over the period leading to a total calculation of how much money was ultimately gained or lost. However there are different kinds of financial statements for different purposes.

Financial statements are the product of a process in which a large volume of data about aspects of the economic activities of an enterprise are accumulated analyzed and reportedExplanation of Financial Statements. The basic objective of any financial statement is to fulfill information needs of the intended users. Broadly we can divide the financial statements in two different types.

An investor wants to see a consistent profit that proves the viability of the business. 1To Show a True and Fair View of Financial Results of the Business. Objectives of the Balance Sheet. The financial statements are the means with the help of which the accounting system performs its main function of providing summarised information about the financial affairs of the business.

Income statement Balance sheet Cash flow statement Funds flow statements ie. Financial Statements – Meaning Nature Objectives Attributes Importance Limitations and Trends Introduction to Cost Accounting. Profit and Loss Statement PL A profit and loss statement PL or income statement or statement of operations is a financial report.

These include the balance sheet the income statement and the statement of cash flows. It is also known as the profit and loss statement PL statement of operations or statement of earnings. The purpose of the income statement may differ somewhat depending on the user.

Investors can also use this information to decide if the company might be a good investment and determine if a business. The main objective of financial accounting and reporting is to give information about the financial performance and position of a company. This process should carry out in conformity with generally accepted. Shows that the company performed well as it made a net profit of 18650 in the year 2018.

From beginning of financial accounting process this objective keeps in the mind. Auditing is a systematic examination of books and records of a business or other organization in order to the assertion or verifies and to report upon the facts regarding its financial operations and the results thereof. To supply necessary information to the users and analysts for taking decisions which will be.

Financial analysts and managers use these financial statements to analyze the companys activities over the period. Objectives of Financial Statements. The income statement is a financial statement that is used to help determine the past financial performance of the enterprise predict future performance and assess the capability of generating future cash flows.

These statements show an accurate state of a companys economic assets and liabilities. They portray the true state of affairs of the company. The Income Statement is one of a companys core financial statements that shows their profit and loss. In a practical sense the main objective of financial accounting is to accurately prepare an organizations financial accounts for a specific period otherwise known as financial statements.

Financial Statements are the collective name given to Income Statement and Positional Statement of an enterprise which show the financial position of business concern in an organized manner. Due to the practical difficulties of assessing. Stakeholders of a company heavily rely on financial statements to understand its functioning.

The primary objective of the entity sharing financial statements is to provide financial information which users of the financial statements existing and potential investors creditors employees customers etc can premise their decision in regard to whether or not to provide resources to the entity. General Purpose Financial Statements Special Purpose Financial Statements As said earlier that the basic objective of every. Following is the simple list of objectives of financial statement.

Objectives of financial statements are the specific purposes or reasons which may include purpose of compliance understanding the fundamentals of the company measuring the financial strength of the business reporting of the performance results financial stability and liquidity to the various stakeholders of the. Income Statement Purpose 2 Through the income statement the reader can comprehend how profitable the business is and what are the various business activities that the company has undertaken. Introduction on Objectives of Financial Statements. Objectives Importance and Limitations Keep study and learn.

One of the major objective of financial statement is to show a true and fair view of financial results of the business. The primary objectives of financial statements are to present the true and fair value of the state of affairs of the firm with the help of its various statements viz. Here are some objectives of financial statements.

Comparative and common size financial statements are two forms of statements used by companies to extract financial information.