Need some help explain the functions and data measurements o

Need some help explain the functions and data measurements of the

balance sheet,

income statement,

and statement of cash flows.

Solution

Financial statements comprise of balance sheet, income statement and statement of cash flow and each denotes specific information related to finance of company.

(1) Balance sheet is called position statement and it depicts the position of total assets and liabilities and shareholders equity on a specific date and information from balance sheet is used for taking solvency and creditworthiness of the the organization on a particular date

(2) Income statement is used for providing information related to operating performance of the company. it provides information related to whether company has earned profit or incurred losses over a specific financial year. Income statement is used to measure financial performance of the company

(3) cash flow statement is used to find the total flow of cash during a year. it includes both cash inflow and outflow. this statement denotes the cash flow during a period in an organization and cash available during the year