Question

The statements prepared by the summarizing process is known as ______ which will show the profit or loss made by the business over a period of time and the total capital employed in the business.

• A. Financial statements
• B. Budgeted statements
• C. Standard cost statements
• D. All of the above

Answer 1

The correct option is A Financial statements

Financial statements are summary reports. Summary report shows how a firm has used the funds entrusted to it by its stakeholders and lenders and what is its current financial position. The three basic financial statements are 1. Balance Sheet 2. income statements 3. Cash Flow statement.
Balance sheet shows firm's assets, liabilities and net worth on a stated date.
Income Statement shows how the net income has arrived over a certain period.
Cash flow statement shows the inflows and outflows of cash caused by the firm's activities over a stated period.