Which of the following statements best defines financial statements?
A) Financial statements are the information systems that record monetary and nonmonetary business transactions.
B) Financial statements are the verbal statements made to business news organizations by chief financial officers.
C) Financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions.
D) Financial statements are plans and forecasts for future time periods based on information from past financial periods.

Question

Quizplus · Accepted Answer

Financial statements are formal written reports that provide information about a business's financial performance and position. They use monetary values to report on the company's profitability, liquidity, and solvency. The purpose is to provide information to users, such as investors, creditors, and management, to make better-informed decisions. Option A describes accounting systems, while option B describes media interviews. Option D describes financial projections, which are different from financial statements.

Which of the Following Statements Best Defines Financial Statements