Match List-I with List-IIList-IList-II(A)These are the statements sho…

Match List-I with List-II

List-I		List-II
(A)	These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods.	(I)	Common Size Statements
(B)	It summarises the causes for the changes in cash position of a business enterprise between dates of two balance sheets.	(II)	Comparative Statements
(C)	These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item.	(III)	Ratio Analysis
(D)	It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.	(IV)	Cash Flow Analysis

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (A) - (II), (B) - (IV), (C) - (I), (D) - (III)

Each description in List-I is one of the tools of analysis of financial statements.

(A) These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods. — this matches (II) Comparative Statements. The figures of two or more years are set side by side, which is why this is also called horizontal analysis.

(B) It summarises the causes for the changes in cash position of a business enterprise between dates of two balance sheets. — this matches (IV) Cash Flow Analysis. It looks at the actual inflow and outflow of cash and explains why the cash balance rose or fell.

(C) These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item. — this matches (I) Common Size Statements. Each item is shown as a percentage of one common figure, such as revenue from operations or total assets.

(D) It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm. — this matches (III) Ratio Analysis. A ratio relates one accounting figure to another, within one statement or across the two.

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Comparative Statements: These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods.”

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Common Size Statements: These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item.”

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Ratio Analysis: It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.”

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Cash Flow Analysis: It refers to the analysis of actual movement of cash into and out of an organisation. … Thus, it summarises the causes for the changes in cash position of a business enterprise between dates of two balance sheets.”