Which of the following statements about a company’s financial record-keeping obligations is not correct? Group of...

Which of the following statements about a company’s financial record-keeping obligations is not correct?

Group of answer choices

a.Every company is required to keep written financial records that correctly record and explain its transactions and financial position and performance.

b.Every company is required to keep written financial records that would enable true and fair financial statements to be prepared and audited.

c.Every company is obliged to prepare financial statements every year.

d.‘Financial records’ include invoices, receipts, payment orders, documents of prime entry and working papers.

Solutions

Expert Solution

The answer is C.

When considering he record keeping obligations of the organizations, each and every organization are obligated to prepare the financial records, explain the transactions and the financial position of the organization. Hence, option A is correct.

When the organization maintains proper financial records, it would help the preparation of the financial statements. Fair and true financial records can make the auditing process easier. Hence, option A is also correct.

The small organization or firms are not required to produce the financial statements. They are supposed to produce only financial records which would suffice the auditing process. Hence, this statement is incorrect and it is the answer

As per the rules the financial records maintained by the organizations should involve records’ include invoices, receipts, payment orders, documents of prime entry and working papers. Hence, it is also correct statement.

keosha answered 3 months ago

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