Financial Statements Are Prepared

question 40

Multiple Choice

Financial statements are prepared:

• A)Only for publicly owned business organizations.
• B)For corporations,but not for sole proprietorships or partnerships.
• C)Primarily for the benefit of persons outside of the business organization.
• D)In either monetary or nonmonetary terms,depending upon the need of the decision maker.

---

Definitions:

Equity Method

An accounting technique used to record investments in associate companies, where the investment's value is adjusted to reflect the investor's share of the associates' profits or losses.

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and equity of a parent company and its subsidiaries, presenting them as a single entity.

Land Account

An account on the balance sheet that represents the cost of land owned by a company. Unlike other fixed assets, the land is not depreciated.

Investment

The allocation of resources (such as capital or time) with the expectation of receiving future returns.