The general purpose of the financial statements is to provide information about the results of operations, financial position, and cash flows of an organization. This information is used to make decisions regarding the allocation of resources.
There are 3 main types of financial statements that are important to your business. They are:
- Income Statement - shows revenues, expenses, and profit or loss for the period of times.
- Balance Sheet - shows the balance of assets, liabilities and equity at the end of the period of time.
- Statement of Cash Flow - shows the movement of entity’s cash during the period.