Which financial reports are considered general purpose reports?

General purpose financial reports are designed to provide relevant financial information to a wide range of users, including investors, creditors, and regulators, without the need for them to request additional reports tailored to their specific needs. The balance sheet, income statement, and cash flow statement are the primary financial statements that fulfill this purpose.

The balance sheet presents a snapshot of an organization’s financial position at a specific point in time, detailing assets, liabilities, and equity. The income statement summarizes revenues and expenses over a period, showing the company's profit or loss. The cash flow statement outlines cash inflows and outflows, highlighting how a company's operations, investing, and financing affect its cash position. Together, these three critical reports give a comprehensive view of the financial health of an organization, which is why they are classified as general purpose reports.

Other report types, such as budget and forecast reports, accounts payable and receivable reports, as well as tax reports and assessments, are more specialized and cater to specific management needs or regulatory requirements rather than providing a broad overview suitable for a diverse audience. Therefore, they do not qualify as general purpose reports.