Financial Statement Conveying Information Meaning

Accounting is a service activity. One of its functions is communication of information at a specific interval, usually at the year end by the financial statements. In accounting financial statements are the means of conveying information to the management, owners etc. The financial statements are least refer to the two statements which are prepared by a business concern at the end of the year. These statements are :

1. Income statement or Trading and Profit and Loss account
2. Position statement or Balance sheet

The trading and profit and loss account is prepared by the business concern to know the Profit earned or Loss sustained during the specified period and on the other hand the Balance sheet is prepared by the business concern on a particular date in order to know the position of the business. These two statements are added the statement of retained earnings and some other statements and schedules of fixed assets and debtors etc. to give the full view of the financial affairs. All these statements are collectively Called as financial statements. 

Statement of earnings or Profit and Loss Appropriation Accounts shows the utilization of Profits i.e. Dividend declared, amount transferred to general reserve or any other reserve  are shown in this account.