alleryStart learning →A yearly document that describes a firm's financial status and discusses its prospects for the future is called what?
AThe general ledger
BThe trial balance
CThe audit journal
DThe annual report
Answer & Solution
Correct answer: D. The annual report
1. The annual report is the yearly document describing a firm's financial status and its prospects for the future.
2. Financial statements are the chief element of that report, and three of them appear in it: the balance sheet, the income statement and the statement of cash flows.
3. Ledgers, journals and the trial balance are internal records used to build the statements, and they are not published as a yearly document.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.1 Accounting: More than Numbers_
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