Question

IAS 1 states that a set of financial statements should comprise of:

A) Balance sheet, income statement, cash flow statement, and statement of changes in equity.
B) Income statement, statement of comprehensive income, statement of financial position, and cash flow statement.
C) Balance sheet, profit and loss statement, cash flow statement, and notes to the financial statements.
D) Statement of financial position, income statement, statement of changes in equity, and statement of comprehensive income.

Answer 1

The correct answer is option D) Statement of financial position, income statement, statement of changes in equity, and statement of comprehensive income.

Step-by-step explanation:

The correct answer is option D) Statement of financial position, income statement, statement of changes in equity, and statement of comprehensive income. IAS 1, which stands for International Accounting Standard 1, specifies that a set of financial statements should include these four components. The statement of financial position, also known as the balance sheet, provides information about an entity's assets, liabilities, and equity at a specific point in time. The income statement reports the entity's revenues, expenses, and net income for a given period. The statement of changes in equity shows the changes in the entity's equity during a period. And the statement of comprehensive income presents the comprehensive income, which includes net income and other comprehensive income.