Which of the following does NOT describe financial statements?

Financial statements are comprehensive reports that summarize an entity's financial performance and position, encompassing various types of transactions. The option stating that financial statements include only cash transactions is not accurate. Financial statements are designed to present a full picture of a company's financial activities, which includes both cash and non-cash transactions. This can include credits and debits related to credit sales, accruals, and other non-cash items that help portray a complete financial view.

In addition to cash transactions, financial statements also reflect economic activities over a given period, often adhering to accounting principles that require the recognition of revenue and expenses when they are incurred, not necessarily when cash is exchanged. Therefore, stating that they only include cash transactions simplifies and misrepresents the broader scope and purpose of financial reporting, which is important for stakeholders making informed decisions based on comprehensive financial data.