What is an Accounting Statement

Accounting statements generally contain economic information for the concern authority or party and these statements are generally issued by the financial institutions or accounts department of an organization. This kind of a document by and large outlines the income, profit or loss or detailed transactions and expenditure of a company or any individual. Regardless of its content and purpose of the statement, the document must have authenticity and should be factually correct by maintaining the financial constraints so that it could essentially serve as a record. The advantages of an accounting statement are varied depending upon the purpose for which it is being presented. However, some of the noteworthy significance among them is as follows.

  • An accounting statement can be a beneficial record for those companies who have to maintain large volumes of monetary transactions or traffic.
  • Such a statement document helps a company to determine the losses of revenues and expenditure incurred throughout the financial year. It also helps in comparing the financial status of an individual or company with previous ones.
  • Even certain benefits could also be achieved through such a document by which the credibility of an organization could be established effectively.

The advantage of an accounting statement document is directly correlated with the pattern by which it is being presented.

  • Irrespective of the purpose, it is essential to mention all the indispensable factors like tax returns, total income and other expenditures so that a detailed statement could be presented.
  • It is necessary to write an accounting statement with easily understandable language without being much effusive or full of verbiage as that might reduce the importance of the document.
  • Authenticity of such a document is essential so that it could be referred for future need. Moreover, it can also serve as a legal paperwork on valid authorization.

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