Accounting reports are compilations of financial information that are derived from the accounting records of a business. These can be brief, custom-made reports that are intended for specific purposes, such as a detailed analysis of sales by region, or the profitability of a specific product line. More commonly, accounting reports are considered to be equivalent to the financial statements. These statements include the following reports:
1. Income statement. States the revenues earned during a period, less expenses, to arrive at a profit or loss. This is the most commonly used accounting report, since it is used to judge the performance of a business.
2. Balance sheet. Shows the ending asset, liability, and equity balances as of the balance sheet date. It is used to judge the liquidity and financial reserves of a business.
3. Statement of cash flows. Shows the sources and uses of cash related to operations, financing, and investments. Can be the most accurate source of information regarding the cash-generating ability of an entity.
A number of disclosures may accompany the financial statements, in the form of footnotes. This is more likely to be the case when the financial statements have been audited.