Which of the following best defines a financial statement?

The definition of a financial statement as a formal record of the financial activities and position of a business is accurate because financial statements provide crucial information that reflects the financial health and performance of an organization. These documents include key elements such as the income statement, balance sheet, and cash flow statement, each serving distinct purposes in illustrating revenue, expenses, assets, liabilities, and cash management over a specific period.

These statements help stakeholders, such as investors, creditors, and management, to assess the company's profitability, solvency, and overall financial stability. They serve as vital tools for decision-making, financial planning, and measuring the success of business operations.

In contrast, employee roles and responsibilities pertain to organizational structure and management, while outlines for new business strategies focus on future planning rather than past financial activities. A report on market competition deals with external business factors rather than internal financial records. Therefore, the choice that accurately encompasses the essence of financial statements is the formal record of the financial activities and position of a business.