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PPT - Financial Statement - II | Accountancy Class 11 - Commerce PDF Download

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Introduction
Financial statements are the end products of
the accounting process, which reveals the
financial results of the specified period and
financial position as on particular date. It is
the basic and formal annual report through
which a business communicates financial
information to its various user groups.
Page 3


Introduction
Financial statements are the end products of
the accounting process, which reveals the
financial results of the specified period and
financial position as on particular date. It is
the basic and formal annual report through
which a business communicates financial
information to its various user groups.
Nature of Financial Statement
1. Recorded facts
2. Accounting conventions
3. Postulates(Assumptions)
4. Personal Judgements
Page 4


Introduction
Financial statements are the end products of
the accounting process, which reveals the
financial results of the specified period and
financial position as on particular date. It is
the basic and formal annual report through
which a business communicates financial
information to its various user groups.
Nature of Financial Statement
1. Recorded facts
2. Accounting conventions
3. Postulates(Assumptions)
4. Personal Judgements
Page 5


Introduction
Financial statements are the end products of
the accounting process, which reveals the
financial results of the specified period and
financial position as on particular date. It is
the basic and formal annual report through
which a business communicates financial
information to its various user groups.
Nature of Financial Statement
1. Recorded facts
2. Accounting conventions
3. Postulates(Assumptions)
4. Personal Judgements
Framework 
for preparing Financial 
Statement
Qualitative characteristics 
of
financial statements
Components of
financial statements
Objectives of financial 
statements
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k
l
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FAQs on PPT - Financial Statement - II - Accountancy Class 11 - Commerce

1. What are the main financial statements?
Ans. The main financial statements are the income statement, balance sheet, and cash flow statement. These statements provide a comprehensive overview of a company's financial performance and position.
2. How is the income statement different from the balance sheet?
Ans. The income statement focuses on a specific period, usually a year, and shows a company's revenues, expenses, and net income or loss. On the other hand, the balance sheet provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and shareholders' equity.
3. What does the cash flow statement reveal about a company?
Ans. The cash flow statement shows the inflow and outflow of cash in a company, providing information on its operating, investing, and financing activities. It helps assess a company's ability to generate cash, its liquidity, and its ability to meet its financial obligations.
4. How can financial statements be used by investors?
Ans. Financial statements are essential for investors as they provide insights into a company's financial health. Investors can analyze financial ratios, such as return on investment and debt-to-equity ratio, to assess profitability, risk, and financial stability before making investment decisions.
5. What is the importance of financial statements for lenders?
Ans. Lenders use financial statements to evaluate a borrower's creditworthiness and determine the terms of a loan. They assess a company's ability to repay the loan by analyzing its financial ratios, cash flow, and overall financial performance. Financial statements help lenders make informed decisions about lending money to a company.
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