The financial statements of a business entity:
A) Include the balance sheet, income statement, and income tax return.
B) Provide information about the profitability and financial position of the company.
C) Are the first step in the accounting process.
D) Are prepared for a fee by the Financial Accounting Standards Board.

Question

Quizplus · Accepted Answer

Financial statements provide information about the profitability (income statement) and financial position (balance sheet) of a company. They are not the first step in the accounting process, and they are not prepared by the Financial Accounting Standards Board (FASB). The income tax return is a separate document that may use information from the financial statements, but it is not a financial statement itself.

The Financial Statements of a Business Entity