What Are The Nature And Importance Of Final Accounts And Balance Sheet?


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Ellie Hoe answered
Financial accounts such as income statement, balance sheet, statement of stockholder's equity and statement of cash flows have lots of importance in terms of their usage. These statements are developed for the sake of company's stakeholders such as general public, shareholders, investors, creditors etc. Balance sheet is also knows as statement of financial positions. It gives comprehensive information about company's assets, liabilities, and stockholder's equity. It classifies the assets into current assets and non-current assets. The cash and cash equivalents figure is derived from statement of cash flows which give a complete depiction of company's cash inflows and outflows from investing, operating and financing activities. The income statement itself provides information about company's revenues and expenses. Hence financial accounts help companies to maintain accounts about the company's financial transactions.

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