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The financial statement of a company generally includes two statements ______ and _______
- a)balance sheet and statement of profit and loss
- b)balance sheet and fund flow statement
- c)auditors report and director's report
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
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The financial statement of a company generally includes two statements...
The Financial Statements of a Company
Financial statements are the reports prepared by a company's management to provide information about the company's financial performance and position. It includes two statements:
1. Balance Sheet
The balance sheet is a statement that shows the company's financial position at a specific point in time. It summarizes the company's assets, liabilities, and equity. It shows what the company owns, what it owes, and what is left over for the owners.
2. Statement of Profit and Loss
The statement of profit and loss is a statement that shows the company's financial performance over a period of time. It summarizes the revenue, expenses, gains, and losses of the company during a specific period. It shows how much profit or loss the company has made during the period.
Importance of Financial Statements
Financial statements are important for several reasons, including:
- They provide information about the company's financial performance and position, which is useful for investors, lenders, and other stakeholders.
- They help the management of the company to make informed decisions about the future of the company.
- They provide a basis for taxation and other regulatory requirements.
- They help to measure the efficiency and effectiveness of the company's operations.
Conclusion
In conclusion, the financial statement of a company generally includes two statements: the balance sheet and the statement of profit and loss. The balance sheet summarizes the company's financial position, while the statement of profit and loss summarizes the company's financial performance over a period of time. These statements are important for investors, lenders, and other stakeholders to make informed decisions about the company's future.
Financial statements are the reports prepared by a company's management to provide information about the company's financial performance and position. It includes two statements:
1. Balance Sheet
The balance sheet is a statement that shows the company's financial position at a specific point in time. It summarizes the company's assets, liabilities, and equity. It shows what the company owns, what it owes, and what is left over for the owners.
2. Statement of Profit and Loss
The statement of profit and loss is a statement that shows the company's financial performance over a period of time. It summarizes the revenue, expenses, gains, and losses of the company during a specific period. It shows how much profit or loss the company has made during the period.
Importance of Financial Statements
Financial statements are important for several reasons, including:
- They provide information about the company's financial performance and position, which is useful for investors, lenders, and other stakeholders.
- They help the management of the company to make informed decisions about the future of the company.
- They provide a basis for taxation and other regulatory requirements.
- They help to measure the efficiency and effectiveness of the company's operations.
Conclusion
In conclusion, the financial statement of a company generally includes two statements: the balance sheet and the statement of profit and loss. The balance sheet summarizes the company's financial position, while the statement of profit and loss summarizes the company's financial performance over a period of time. These statements are important for investors, lenders, and other stakeholders to make informed decisions about the company's future.
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The financial statement of a company generally includes two statements ______ and _______a)balance sheet and statement of profit and lossb)balance sheet and fund flow statementc)auditors report and directors reportd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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