‘Financial statements reflect a combination of recorded facts, accounting conventions and personal judgements’. Discuss.

Explanation

Financial statements reveal truth monetary position of a corporation and facilitate in formulating varied selections and political opinions.
The nature of monetary statements are addicted to these aspects:



1. finances record facts concerning the things at the first worth at that they were purchased and doesn’t take under consideration the prevailing market value, and conjointly don't embrace worth fluctuations thanks to inflation.



2. The monetary statements ar created supported varied accounting conventions like Prudence convention, matching thought etc. and adhering to such conventions lead to the statements being straightforward to know, compare and mirror the truthful and true monetary scenario of the organisation.



3. A finances is predicated on several ideas like going concern thought, realisation thought, and cash mensuration thought. A finances adheres to all or any these ideas once monetary statements are ready.
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