Financial Statements

Financial statements are formal reports showing the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.

- Used in day-to-day bookkeeping and journal entries to record transactions correctly.
- Used when preparing trial balances and reconciling accounts.

- Example: Accountants use **Financial Statements** when recording transactions and preparing the trial balance.

- Why it matters: Ensures accurate records, supports reliable reporting, and reduces posting and reconciliation errors.