Financial Statement

Periodically, may be by every six months, and surely by every year, any business undertaking, and, in general, any organisation dealing in/with funds/money, has to prepare two statements. The purpose is to know whether the institution has earned profits or incurred (suffered) losses during the interval; also to know the business position at the end of the accounting period. For this, the institution prepares "FINAL ACCOUNTS", also called more commonly as "FINANCIAL STATEMENTS". One sets out the Income or Revenue earned during the period - an Income Statement - or an Income and Expenditure Statement, including the expenses or costs incurred for the purpose as well as any losses suffered during the period. Hence, its name "Income Statement" (or Income and Expenditure Statement) or "Profit and Loss Account". The other statement, which is a Position Statement as at the end of the period, also generally designated as the Balance Sheet, sets out the Assets and Liabilities of the organisation as at the end of the period.