Which of the following is NOT a feature of financial statements?

The correct answer is Option (4) → Not disclosing accounting policies

Financial statements exist to give users information they can rely on: about resources and obligations, earning capacity, cash flows and the work of management. One of their objectives is to disclose the significant accounting policies followed and any change in them. Keeping the policies back is the opposite of that objective.

Option (1) To provide information about the earning capacity of the business — An objective of financial statements. Users predict and compare earning capacity from it.

Option (2) To provide information about cash flows — An objective of financial statements. It helps investors and creditors judge future cash flows.

Option (3) To judge effectiveness of management — An objective of financial statements. It shows how well management uses the resources.