The section of the annual report that explains major changes in the income statement,changes in liquidity and capital resources and the impact of inflation is called the ________.
A) notes to the financial statements
B) appendix to the financial statements
C) internal control report
D) management's discussion and analysis

Question

Quizplus · Accepted Answer

The management's discussion and analysis section of the annual report explains major changes in the income statement, changes in liquidity and capital resources, and the impact of inflation. The notes to the financial statements provide additional details on specific items in the financial statements. The appendix to the financial statements may include additional financial information but does not provide an explanation of major changes. The internal control report describes the company's system of internal controls but does not discuss the financial results or changes.

The Section of the Annual Report That Explains Major Changes