Advertisements
Advertisements
Question
Which of the following statement is incorrect?
Options
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.
Advertisements
Solution
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.
