Question

Which of the following statement is incorrect?

विकल्प

• Intra-firm analysis is a comparison of financial statements of an enterprise for two or more accounting periods.

• Inter-firm analysis is a comparison of financial statements of two or more enterprises for the same accounting period.

• Vertical analysis provides information in absolute and percentage form.

• An income statement indicates the financial position of an enterprise for an accounting period.

Answer 1

An income statement indicates the financial position of an enterprise for an accounting period.

Explanation:

This statement is incorrect because an income statement (statement of profit and loss) measures the financial performance (net profit or loss) of a business over a period of time. In contrast, it is the balance sheet that indicates the actual financial position (assets, equity, and liabilities) of an enterprise at a specific point in time.