Financial statements are part of accounting.

Financial statements are a crucial component of accounting as they provide a summary of a company's financial transactions and activities. These statements are prepared at the end of an accounting period to provide an overview of the company's financial performance, financial position, and cash flows.

Here are some key points to understand why financial statements are part of accounting:

1. Definition of Accounting:
Accounting is the process of recording, summarizing, analyzing, and interpreting financial transactions of a business. It involves the systematic and comprehensive recording of financial data to produce useful information for decision-making.

2. Purpose of Financial Statements:
Financial statements serve the purpose of communicating the financial information of a business to various stakeholders, such as investors, creditors, employees, and government authorities. These statements provide a snapshot of the company's financial health and help in assessing its performance, profitability, and liquidity.

3. Components of Financial Statements:
Financial statements typically include four main components:

a. Income Statement: It reports a company's revenues, expenses, gains, and losses for a specific period. The income statement helps in determining the net income or net loss of the business.

b. Balance Sheet: It presents a company's assets, liabilities, and shareholders' equity at a specific point in time. The balance sheet provides insights into the company's financial position and its ability to meet its obligations.

c. Cash Flow Statement: It shows the inflows and outflows of cash and cash equivalents during a specific period. The cash flow statement helps in understanding the company's liquidity and cash management.

d. Statement of Changes in Equity: It summarizes the changes in a company's equity during a specific period, including contributions, distributions, and retained earnings.

4. Compliance with Accounting Standards:
Financial statements need to comply with accounting standards and regulations. These standards provide guidelines on the measurement, recognition, and presentation of various financial elements, ensuring consistency, comparability, and transparency in financial reporting.

5. Importance for Decision-Making:
Financial statements play a crucial role in decision-making processes, both internally and externally. Managers use these statements to evaluate the company's performance, make strategic decisions, and plan for the future. External users rely on financial statements to assess the company's creditworthiness, investment potential, and overall financial stability.

In conclusion, financial statements are an integral part of accounting as they provide a comprehensive view of a company's financial performance and position. They are prepared in accordance with accounting standards and serve as a key tool for decision-making and financial analysis.