Sample Essay What are Financial Statements
Financial statements are financial summaries that measure the business’s financial health over a given period of time and how well it’s fairing in monetary terms. There are various financial statements. However, the most common financial statements include Profit and loss accounts (P&L a/c) and Balance sheets.
The other financial statement includes Cash flow statements. The profit and loss Statement is also called the income statement. P& L a/c is a financial summary of the operating incomes and operating expenses among other expenses professionally prepared to deduce the operating profits.
P&L a/c is made up of two parts; Trading account which calculates the gross profits/ loss. The second part calculates the net profits by deducting the operating expenditures and tax from the gross profits.