What Are Financial Statements? - Definition, Purpose & Importance


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What are financial statements?

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1. Why is a Balance Sheet an important financial statement?

2. What is the difference between a Statement of Cash Flows and Income Statement?

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About This Quiz & Worksheet

This quiz and worksheet will test your understanding of vocabulary related to financial statements. You'll need to be familiar with several different types of financial statements.

Quiz & Worksheet Goals

These assessment tools will test your knowledge of:

  • Financial Statements
  • Type of statement that shows the manner in which money came into a company and the manner in which it went out
  • Type of statement on which all assets would be listed
  • Type of statement that indicates how much earned money was reinvested in a company
  • Type of statement that tells whether a company earned or lost money over a particular time period

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related financial statements lesson
  • Making connections - use understanding of the concept of financial statements in different contexts
  • Information recall - access the knowledge you've gained regarding financial statements

Additional Learning

To learn more about financial statements, review the accompanying lesson on financial statements, their importance, and their purpose. The lesson covers the following topics:

  • Define financial statements
  • Identify the type of statement that indicates whether a company made or lost money over a certain time period
  • Understand the type of statement that indicates how much of the money that's made is reinvested in a company
  • Learn which statement lists all assets, liabilities, and owner's equity
  • Find out which statement tells us how much money came into a company and how much went out