Assertion: Financial Statements are the summarised statements which give information as to profitability and financial position of the company.

Reasoning: Statement of profit and loss gives the information as to net profit or net loss for the year while Balance Sheet gives information of financial position of the company as at that date..

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Financial statements are the basic and formal annual reports through which the corporate management communicates financial information to its owners and various other external parties which include investors, tax authorities, government, employees, etc. Statement of Profit shows the profit/loss for the year while the Balance Sheet gives information of financial position of a company at a particular date.