Question

The term ‘Financial Statement’ includes:

• A. Statement of Profit and Loss
• B. Balance Sheet
• C. Both (A) and (B)
• D. None of these

Hint:

Financial Statements = Statement of Profit and Loss + Balance Sheet (sometimes also includes Cash Flow Statement).

Answer 1

The Correct Option is C

Step 1: Define Financial Statements.
Financial statements are formal records summarizing the financial activities and position of a business.
Step 2: Major components.
- Statement of Profit and Loss: Shows the performance of the business (income, expenses, and net profit/loss).
- Balance Sheet: Shows the financial position on a given date (assets, liabilities, equity).
Step 3: Conclude.
Since both Profit & Loss A/c and Balance Sheet are part of financial statements, the correct answer is “Both (A) and (B)”.
Final Answer: \[ \boxed{\text{Both (A) and (B)}} \]