Financial statements are the reports prepared by the company to provide information about its financial performance and position to the stakeholders. These statements include the balance sheet, income statement, cash flow statement, and statement of changes in equity.

Answer:

The correct answer is option 'D', which states that financial statements do not consider assets and liabilities expressed in non-monetary terms.

Explanation:

Financial statements are prepared using the monetary concept, which means that only those transactions are recorded in the accounting books that can be expressed in monetary terms. For example, the value of a building or machinery is expressed in monetary terms, and these are considered as assets in the balance sheet. Similarly, the amount owed to creditors or banks is expressed in monetary terms, and these are considered as liabilities in the balance sheet.

However, there are certain assets and liabilities that cannot be expressed in monetary terms, and these are not considered in the financial statements. For example, the skills and knowledge of the employees, the reputation of the company, the quality of the products, etc., are all important assets of the company, but they cannot be expressed in monetary terms. Similarly, the goodwill of the company, the loyalty of the customers, the environmental impact of the company, etc., are all important liabilities of the company, but they cannot be expressed in monetary terms.

Therefore, financial statements do not consider assets and liabilities expressed in non-monetary terms. However, companies may provide additional information in the notes to the financial statements or in the management discussion and analysis (MD&A) section of the annual report to highlight the importance of these non-monetary assets and liabilities.

In conclusion, financial statements are essential tools for evaluating the financial performance and position of a company, but they only provide a partial picture of the company's overall value and impact.

Yes, assets and liabilities expressed in non monetary terms are not considered in financial statements. Because anything that can't be measured in any currency can't be written down in books of account. It means business can not show it in business. so it is not considered in financial statements.