Financial statements fall into three broad categories, which are
A) debits, credits, and loans.
B) income statements, balance sheets, and statements of cash flows.
C) assets, liabilities, and owners' equity.
D) cash, marketable securities, and goodwill.
E) budgets, income statements, and profit-and-loss statements.

Question

Quizplus · Accepted Answer

Financial statements are generally classified into three main categories: income statements, balance sheets, and statements of cash flows. Income statements show a company's revenues and expenses over a specific period, while balance sheets present a snapshot of a company's financial position at a given point in time. Statements of cash flows detail the inflows and outflows of cash within an organization over a defined time period. Therefore, option B is the correct answer.

Financial Statements Fall into Three Broad Categories, Which Are