Financial Statements of a Company — Important Questions

Balance Sheet, Statement of Profit and Loss, Cash Flow Statement

The three main financial statements are Balance Sheet (showing financial position), Statement of Profit and Loss (showing performance), and Cash Flow Statement (showing cash movements). Trial Balance and Bank Reconciliation are internal accounting documents, not financial statements.

Share Capital, Reserves and Surplus, Money received against Share Warrants

Shareholders' Funds include Share Capital, Reserves and Surplus, and Money received against Share Warrants. Trade Payables and Long-term Borrowings are liabilities, not part of shareholders' funds.

Twelve months or operating cycle

As per Schedule III, an asset is classified as current if it is expected to be realized within twelve months from the reporting date or within the operating cycle, whichever is longer.

Trade Receivables

Schedule III has replaced the term 'Sundry Debtors' with 'Trade Receivables' to provide better clarity about amounts due from customers for goods sold or services rendered in the normal course of business.