The information provided by financial statements is ________ in nature.
Answers
Answer:
The accounting records and financial statements prepared from these records are based on historical costs. The financial statements, by nature, are summaries of the items recorded in the business and these statements are prepared periodically, generally for the accounting period.
The information provided by financial statements is conventional in nature.
Explanation:
Financial statements are the end results of accounting process, which shows the financial outcomes of the specific accounting period and financial position of the company on a particular date. they are prepared using facts related to events, which are recorded chronologically in monetary terms. while creating these statements we apply certain conventions as per the accounting standards. they are based on historical facts and figures thus rendering them conventional in nature. they depict not only profits and losses, but assets and liabilities as well thus can only be prepared at the end of all accounting process.