Posts

Showing posts from January, 2018

Financial statement analysis

Image
Financial Statement: Meaning and Limitations 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. We know that all business transactions are first recorded in the books of original entries and thereafter posted to relevant ledger accounts. For checking the arithmetical accuracy of books of accounts, a Trial Balance is prepared. Trial balance is a statement prepared as a first step before preparing financial statements of an enterprise which record all debit balances in the debit column and all credit balances in credit column. To find out the profit earned or loss sustained by the firm during a given period of time and its financial position at a given point of time is one of the purposes of accounting. For achieving this objective, financial statements are prepared by the business enterprise, which include income statement and posit...