Question

What is the meaning of Financial Statement?

Hint:

Financial statements = Balance Sheet + Statement of Profit and Loss, summarising position and performance.

Answer 1

Step 1: State what financial statements are:
Financial statements are the formal, organised records prepared at the end of an accounting period that present the financial position and financial performance of a business.

Step 2: Name the two core statements:
They mainly comprise the Balance Sheet (showing assets, liabilities, and capital at a point in time) and the Statement of Profit and Loss (showing income and expenses over the period, and the resulting profit or loss).

Final Answer:
Financial statements are the summarised, formal records — chiefly the Balance Sheet and the Profit and Loss Statement — that show a business's financial position and performance for a period.