Question

Companies typically present their financial statements in comparative form, which means showing ______.

A) Three consecutive years of balance sheets and four consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity
B) Two consecutive years of balance sheets and two consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity
C) The last fiscal year's balance sheet income statement, statement of cash flows, and statement of stockholders' equity
D) Two consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity.

Answer 1

Companies typically present their financial statements in comparative form, which means showing two consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity.

Step-by-step explanation:

Companies typically present their financial statements in comparative form, which means showing two consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity.

This allows stakeholders to compare the company's financial performance and position over a period of time. By comparing the financial statements of different years, stakeholders can analyze trends, identify areas of improvement, and make informed decisions.

For example, comparing the income statement of two consecutive years can show whether the company's revenue increased or decreased, while comparing the balance sheet can reveal changes in assets, liabilities, and stockholders' equity.