Question

Mention two objectives of financial statements.

Hint:

Financial statements = “Report card of business” used for planning and control.

Answer 1

Step 1: Meaning. Financial statements are the summarized reports of a business, including Profit & Loss Account and Balance Sheet.
Step 2: Objectives. - They show the profitability of the business by reporting incomes and expenses. - They present the financial position through assets and liabilities. - They help owners, creditors, investors, and managers in decision-making.
Step 3: Conclusion. The two major objectives are: (i) to show performance and position, and (ii) to provide a basis for decisions.
Final Answer: \[ \boxed{\text{1. Show performance and position \quad 2. Aid decision-making}} \] % Quciktip