a company's financial sta statements reflect only the business activities of that company and not that of the shareholders. each shareholders' activities must be revealed in the financial statements. each separate owner's finances must be revealed in the financial statements.

Question

a company's financial sta statements reflect only the business activities of that company and not that of the shareholders. each shareholders' activities must be revealed in the financial statements. each separate owner's finances must be revealed in the financial statements.

Answer 1

The first statement is **correct**: A company's financial statements reflect *only* the business activities of that company, not those of its shareholders. This is known as the **separate entity concept** or **economic entity assumption**. It treats the business as distinct from its owners. The company's assets, liabilities, revenues, and expenses are kept separate from the personal finances of the shareholders.The second and third statements are **incorrect**. Shareholder activities and their personal finances are *not* disclosed in the company's financial statements. The financial statements focus solely on the financial performance and position of the business itself.

Question

a company's financial sta statements reflect only the business activities of that company and not that of the shareholders. each shareholders' activities must be revealed in the financial statements. each separate owner's finances must be revealed in the financial statements.

Solution

Answer