Four Basic Financial Statements

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The purpose of the four basic financial statements is to report the financial condition of a business at any point in time and changes in the financial condition over a period. They allow a company to evaluate the company current situation and make changes if needed and it hel.ps determine if the company is a good investment for investors.
The Income Statement is the profit and loss statement that shows changes in the financial condition of a company during a specific period and gives a snap shot of profitability
The Statement of the stockholder’s equity reports changes in financial condition due to changes in stockholder’s equity for a period which involves common stock and retained earnings.

The Balance Sheet reports the financial position

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