Question

Q6. What are comparative statements? Substantiate with example.​

Answer 1

Answer:

Comparing the P&L Statement and the Balance Sheet

Comparative statements can also be used to compare different companies, assuming that they follow the same accounting principles. For example, they can show how different businesses operating in the same industry react to market conditions.

Answer 2

Explanation:

A comparative statement is a document used to compare a particular financial statement with prior period statements. Previous financials are presented alongside the latest figures in side-by-side columns, enabling investors to identify trends, track a company's progress and compare it with industry rivals.