What is the difference between a financial document and a financial statement?

What is the difference between a financial document and a financial statement Introduction: The Significance of Financial Records Greetings, finance enthusiasts! Whether you're an aspiring accountant or a business owner, comprehending financial records is vital. Today, we'll explore the distinction between two fundamental terms: financial documents and financial statements. Defining Financial Documents Financial documents encompass a broad range of records. They can be physical or digital, serving as evidence of financial transactions. Examples include invoices, receipts, purchase orders, and bank statements. Essentially, any record that substantiates a financial event can be classified as a financial document. The Purpose of Financial Documents Financial documents serve multiple purposes. Firstly, they provide a detailed account of transactions, enabling businesses to track their financial activities. Additionally, these records are crucial during audits, as they validate the accuracy of financial statements. Moreover, financial documents aid in tax preparation, ensuring compliance with legal requirements. Understanding Financial Statements