Financial statements are prepared at the end of a period to reflect profit or loss and the financial position at that time. They typically include the income statement, balance sheet, and cash flow statement.

Example: A tech startup preparing its annual accounts would include an income statement showing its revenue and expenses, a balance sheet detailing its assets and liabilities, and a cash flow statement summarising its inflows and outflows of cash. These accounts provide potential investors with a clear picture of the company’s financial health.