Welcome to the NCERT Solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Financial Statements of a Company. This page offers a step-by-step solution to the specific question from Exercise 1, Question 4: . With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.
State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors
(i)Shareholders- They are interested in assessing the profitability and viability of the capital invested by them in the business. The financial statements prepared by the business concerns enable them to have sufficient information to assess the financial performance and financial health of the business.
(ii) Creditors- Creditors are interested in the financial statements of businesses to learn about the status of their going concern, profitability, financing, liquidity, and cash flow. An entity is a going concern if it is likely to remain in business for the foreseeable future without going into bankruptcy.
(iii) Government- As a business owner, your financial statements offer valuable
information about your companys overall financial position, such as areas of
financial strength or weakness. Financial statements are important to tax authorities to ensure the accuracy of taxes and additional duties declared and
paid by your company.
(iv) investors- Financial statements are important to investors because they can
provide enormous information about a companys revenue, expenses,
profitability, debt load, and the ability to meet its short-term and long-term
financial obligations.
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
Stay updated with our latest educational content and study tips
One of the challenging things students face nowadays is procrastination. It hinders productivity, making it difficult for students to score well. We often associate procrastination as just being lazy. But there’s more to it. Various studies have shown that procrastination stems from negative feelings such as stress and anxiety. Oftentimes, when we start, we think […]
Read MoreThe CBSE Board Exam is a crucial milestone for millions of students across India. The Central Board of Secondary Education is famous for its imparting quality education and knowledge which reaches out to a large share of students. Also, it is important to know that, the CBSE board takes a slight unconventional route, since it […]
Read MoreHaryana government issued a notification on 31st December 2024 through its Gazette notification No. 42/119/2019-5HR-II for CET Haryana 2024. The Common Eligibility Test (CET) for Haryana is a significant opportunity for candidates seeking government jobs in Group C and Group D posts. Below is a comprehensive summary of the key information you need to know […]
Read MoreSacrificing your sleep to study more is doing more damage than you think. While it may seem like utilizing every hour of the day for study leads to better outcomes, the reality is quite the opposite. Lack of proper rest can negatively impact your brain, especially when it comes to sleep and memory retention. You’ll […]
Read MoreWelcome to the NCERT Solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 4: State the importance of financial statements to (i) shareholders (ii) creditors (iii) government ....
Add Comment