Question

The basic financial statements include a
a. Balance sheet, income statement, statement of retained earnings, and statement of changes in retained earnings.
b. Statement of financial position, income statement, statement of cash flows, and statement of changes in retained earnings.
c. Balance sheet, Statement of financial position, income statement, and statement of changes in retained earnings.
d. Statement of financial position, income statement, statement of cash flows, and statement of retained earnings

Answer 1

Solution -

The Basic Financial statement includes a statement of financial positions, Income statement, Statement of cash flows and statement of changes in Retained earnings.

Statement of financial positions includes Balancesheet, profit and loss Accounts.

This all statement comprises a Basic financial statements. This is basically for external users who understand the company's position and standard in the Market. And also users understands the profit and loss of the company.

Basic financial statements are beneficial for all to go through the company ability into the Market.

Hence, the correct answer is point B i.e. Basic Financial statement includes statement of financial positions, Income statements, Statements of cash flow and statement of changs in Retained Earnings.

Thanks