Asked by Bailey McPhee on May 09, 2024
Verified
What are the three main financial statements?
A) Profit and Loss,Balance Sheet and Statement of Cash Flows
B) Budget to Actual,Balance Sheet and Statement of Cash Flows
C) Profit and Loss,Trial Balance and Statement of Cash Flows
D) Profit and Loss,Balance Sheet and Adjusted Trial Balance
Statement of Cash Flows
A Statement of Cash Flows is a financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.
Profit and Loss
A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, indicating the net profit or loss.
Adjusted Trial Balance
A financial statement that displays all balances of accounts after adjusting entries have been made at the end of an accounting period, ensuring the ledger's accuracy.
- Understand the structure and importance of the three main financial statements.
Verified Answer
BN
Benish NabeelMay 10, 2024
Final Answer :
A
Explanation :
The three main financial statements are the Profit and Loss (also known as Income Statement), Balance Sheet, and Statement of Cash Flows. These statements provide valuable information about a company's financial performance, position, and cash flow. The Budget to Actual and Trial Balance are not considered as main financial statements. The Adjusted Trial Balance is a part of the accounting cycle and is not a financial statement on its own.
Learning Objectives
- Understand the structure and importance of the three main financial statements.