Which of the following is true about financial statements:
a. Financial statements gives a summary of accounts.
b. Financial statements can be stated as recorded facts.

Only (a)

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Only (b)

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Both (a) and (b)

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None of the above

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Solution

The correct option is B Both (a) and (b)
Financial statement is a summarized financial reports which provide the operating results and financial position of the company. Financial statement states recorded facts.

Financial statement analysis is basically study of relationship among various financial facts and figures as given in a set of financial statement.

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Similar questions

`Financial statements reflect a combination of recorded facts, accounting conventions and personal judgments’ discuss.

Which of the following statement is true?

Statement A: Financial statements are prepared on the basis of accounting principles.

Statement B: Any changes in the accounting principles or method will affect the utility of the financial statements.

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