Question

What is the purpose of cross-referencing each item on the face of the Balance Sheet and Statement of Profit and Loss to related information in the notes to accounts?

a.

To simplify the Financial Statements

b.

To maintain balance between providing excessive detail and not providing important information

c.

To replace the information presented on the face of the Financial Statements

d.

To avoid providing any additional information in the notes to accounts.

Posted under IC 89 Management Accounting

Answer: (b).To maintain balance between providing excessive detail and not providing important information Explanation:Cross-referencing is done to maintain a balance between providing excessive detail and not providing important information in the Financial Statements and notes to accounts.

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Q. What is the purpose of cross-referencing each item on the face of the Balance Sheet and Statement of Profit and Loss to related information in the notes to accounts?
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