QThe overriding purpose of financial accounting is to summarize financial activity in business in the ____
A. Profit and loss statement
B. Balance Sheet
C. Cash Flow Statement
D. All of the Above
Correct Answer:D
Explanation:
The overriding purpose of financial accounting is to summarize financial activity in business in the **financial statements**.
Financial statements typically include:
1. **Income Statement (Profit and Loss Statement):** Summarizes revenue, expenses, and profits over a specific period.
2. **Balance Sheet:** Provides a snapshot of a company`s assets, liabilities, and shareholders equity at a specific point in time.
3. **Cash Flow Statement:** Shows the inflows and outflows of cash over a period.
4. **Statement of Changes in Equity:** Details changes in the company`s equity over a period.
These statements are used by various stakeholders, including investors, creditors, management, and regulators, to assess the financial health and performance of the business.