Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 2 - No. 13)
What is the purpose of preparing a statement of financial position?
To determine the company's profitability.
To show the company's financial position at a specific point in time.
To show the cash inflows and outflows of the company.
To calculate the cost of goods sold.
Explanation
The statement of financial position (balance sheet) shows what a company owns (assets), what it owes (liabilities), and the owners' equity at a specific point in time.
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