Which of the following statements is CORRECT?
A) The four most important financial statements provided in the annual report are the balance sheet,income statement,cash budget,and the statement of stockholders' equity.
B) The balance sheet gives us a picture of the firm's financial position at a point in time.
C) The income statement gives us a picture of the firm's financial position at a point in time.
D) The statement of cash flows tells us how much cash the firm must pay out in interest during the year.
E) The statement of cash flows tells us how much cash the firm will require during some future period,generally a month or a year.

Question

Quizplus · Accepted Answer

The balance sheet gives us a snapshot of the company's financial position at a specific point in time, while the income statement shows the company's financial performance over a period of time. Option A is incorrect as cash budget is not a financial statement. Option C is incorrect as it repeats the description of the balance sheet. Option D is incorrect as the statement of cash flows only shows how much cash is paid out for interest, but not how much must be paid out. Option E is incorrect as the statement of cash flows shows past cash inflows and outflows, not future requirements.

Which of the Following Statements Is CORRECT