Question

Select the appropriate answer from the alternatives given below & rewrite the completed statements :

The methodical classification of financial statement is called _____________.
a) an interpretation
b) an analysis
c) ratio
d) profit and loss A/c

Answer 1

The methodical classification of financial statement is called an analysis.

Explanation: The classification of financial statement is done to evaluate the health of a business concern. The methodical classification of the items in the financial statements helps to analyse and draw various conclusions regarding profitability, efficiency, liquidity and financial position of the business.