Final answer:
The firm's annual report contains both the financial statements and the notes to the financial statements.The financial statements and the notes are important parts of an annual report.
Step-by-step explanation:
The answer to the question is a. True. An annual report of a firm typically includes two main components: the financial statements and the notes to the financial statements. The financial statements provide detailed information about the company's financial performance, including its revenues, expenses, and profitability. The notes to the financial statements provide additional explanations and disclosures that help the readers understand the financial statements better. Therefore, both the financial statements and the notes are important parts of an annual report.