Question

The financial statements of a business enterprise include ______.

Options

• Balance sheet

• Profit and loss account

• Cash flow statement

• All the above

Answer 1

All the above.

Explanation:

Financial statements are the basic and formal annual reports that corporate management uses to communicate financial information to its owners and numerous other external parties such as investors, tax authorities, government, employees, and so on. Typically, these relate to:

• The balance sheet (statement of financial status) at the conclusion of the accounting period, and
• A company's profit and loss account (income statement). The cash flow statement is now considered an essential component of a company's financial statements.
• The study of actual cash movement into and out of a company is referred to as a cash flow statement. Cash inflow or positive cash flow is the flow of money into a company, whereas cash outflow or negative cash flow is the flow of money out of the company.