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 Financial statements and its nature
The collection of information based on accounting in a methodical, reasonable and constant manner with is users are the simplest way of explaining about financial analysis.  According to Alan Kohler, financial journalist for 41 years explains finance as the statements that show both performances as well as financial position of the company.

It is well known that statements are made to refer income statements and balance sheet. But there are many factors that help to derive statements that will deal with Nature of Financial Statements Homework Help. The factors are:

  • Accounting notion: it uses the principles of accounting that are generally accepted to record all transactions that are done in a company and noted in the account books as per the guidelines of GAAP as it has concepts and assumptions. Thus, values of inventory at the end of year are influenced by these principles.
  • Facts that are recorded: statements contain the facts related to transactions that are already recorded in accounts book but the other factors like human resources are not recorded as it may not be calculated.
  • Judgment on personal level: statements are made by the guidelines of GAAP but there application may depend on judgment of accountant solely.
  • Accounting rule: certain principles may be based on the satisfaction of people who had been using it for a long time. In simple words it is the usage of the usual practices of both economic and social life of humans that has been accepted to form the principles of accounting.

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