Which Two Basic Statements Provide Most of the Financial Data

question 96

Multiple Choice

Which two basic statements provide most of the financial data needed for analysis?

• A) statement of retained earnings and income statement
• B) sources and uses of working capital and the balance sheet
• C) non-operating gains and losses and statement of financial position
• D) historical income statement and balance sheet
• E) statement of financial position and statement of owner's equity

---

Definitions:

Depreciation

A reduction in the value of an asset over time due to wear and tear or obsolescence.

Net Investment

The net expenditure on acquiring new capital assets after deducting the depreciation of the present capital assets.

Limited Liability

A legal structure that limits the financial liability of an individual in a business to their investment in the company, protecting personal assets from business debts and obligations.

Personal Assets

Items of value owned by an individual, including both tangible assets like property and financial assets such as cash and stocks.