Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:
Why the government is interested in analysis of financial statements of a company or companies?
Options:
To study the present business and economic conditions
For price regulations, taxation
Both 1 and 2
None of these
Correct Answer:
Both 1 and 2
Explanation:
The government agencies need it for price regulations, taxation and other similar purposes. The analysis also provides the basis for many governmental actions relating to licensing, controls, fixing of prices, ceiling on profits, dividend freeze, tax subsidy and other concessions to the corporate sector.