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CMA Foundation · Fundamentals of Financial and Cost Accounting · Four Frameworks of Accounting and Forms of Organization

Which of the following is the statute that prescribes the form and content of the annual financial statements of a company registered in India?

The Companies Act, 2013 prescribes the form and content of a company's annual financial statements, mainly through Schedule III, and requires them to show a true and fair view. The Contract Act, Sale of Goods Act and Negotiable Instruments Act do not govern financial statement presentation.

  1. AIndian Contract Act, 1872
  2. BCompanies Act, 2013Correct
  3. CSale of Goods Act, 1930
  4. DNegotiable Instruments Act, 1881

Explanation

The Companies Act, 2013 requires companies to prepare financial statements in the format given in Schedule III and to give a true and fair view. The other Acts deal with contracts, sale of goods and negotiable instruments, not the presentation of company accounts.

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