Question

Which of the following financial statements shows the financial position of a business?

• A. Balance sheet
• B. Income statement
• C. Cash flow statement
• D. Statement of changes in equity.

Answer 1

The correct option is B Income statement

A financial statement is a collection of data organised according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. The financial statements are comprised of four basic reports, which are Income statement, Balance sheet, Statement of cash flows, Statement of retained earnings.

Financial Statements are the collective name given to Income Statement and Positional Statement of an enterprise which show the financial position of business concern in an organised manner.