Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:
What is the name given to process of explaining the meaning and significance of the financial data of a company?
Options:
Analysis
Interpretation
Both
None of these
Correct Answer:
Interpretation
Explanation:
The term ‘financial analysis’ includes both ‘analysis and interpretation’. The term analysis means simplification of financial data by methodical classification given in the financial statements. Interpretation means explaining the meaning and significance of the data.