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Best Objectives Of Financial Statements Assignment Help Service Experts Have Outlined Twotypes Of Financial Statements. They Are
General Purpose Financial Statements are prepared for general users keeping general needs in mind and thus may not provide all such information that users may want.
Special Purpose Financial Statements provide additional information which is not provided by general purpose financial statements. Special purpose financial statements may be or may not be prepared under the same accounting framework which is used to prepare general purpose financial statements. Examples include; financial statements prepared for Bank to request loan
financial performance and
changes in financial position of the entity to the wide range of users in making economic decisions.
There are three main objectives of General Purpose Financial Statements
Financial Position of the entity which means the position of the business’ assets and liabilities and how entity uses the resources at its disposal to adapt the changing business requirements and solvency. This information is presented in Statement of Financial Position which was known as Balance Sheet.
Financial Performance of the entity means the ability to use the economic resources available in a profitable manner and how well entity managed to generate considerable cash flows by consuming such resources. This information is presented in Statement of Comprehensive Income.
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Changes in financial position means how business activities have affected the investors’ stake in the entity. This information is needed by users to assess whether entity has made satisfactory contribution to their investments or not. investors are interested in knowing that how much cash and cash equivalents have been generated and where they have been utilized. This information is presented in the form of Statement of Cash Flows and Statement of Changes in Equity.
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