Financial statements represent a formal record of the financial activities of an entity. These are written reports that quantify the financial strength, performance, and liquidity of a company. Financial statements reflect the financial effects of business transactions and events on the entity.
Financial statements are summarised reports of accounting transactions. The financial statement contains the financial information of an enterprise. It is the result of the accounting process, which begins with the recording of transactions. And the accounting process involves recording, classifying, and summarising business transactions. The basic objective of a financial statement is to help with decision-making. Financial statements may be prepared in accordance with Generally Accepted Accounting Principles and Procedures.