Question:
Under the Companies Act, 2013, the ‘financial statement’ in relation to a company, includes: -
(i) A profit and loss account for the financial year.
(ii) A balance sheet as at the end of the calendar year.
(iii) A statement of changes in equity, if applicable.
(iv) An income and expenditure account for the financial year in case of not-for-profit companies.
Under the Companies Act, 2013, the ‘financial statement’ in relation to a company, includes: -
(i) A profit and loss account for the financial year.
(ii) A balance sheet as at the end of the calendar year.
(iii) A statement of changes in equity, if applicable.
(iv) An income and expenditure account for the financial year in case of not-for-profit companies.
(i) A profit and loss account for the financial year.
(ii) A balance sheet as at the end of the calendar year.
(iii) A statement of changes in equity, if applicable.
(iv) An income and expenditure account for the financial year in case of not-for-profit companies.
Show Hint
Pay close attention to words like "calendar year" versus "financial year".
Under Section 2(41) of the Companies Act, 2013, the financial year for all Indian companies must end on the 31st of March.
Under Section 2(41) of the Companies Act, 2013, the financial year for all Indian companies must end on the 31st of March.
Updated On: Jul 7, 2026
- Only (i), (ii), and (iii)
- Only (ii), (iii), and (iv)
- Only (i), (ii), and (iv)
- Only (i), (iii), and (iv)
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The Correct Option is D
Solution and Explanation
Step 1: Understanding the Question:
The question asks to identify what constitutes a "financial statement" of a company as defined under Section 2(40) of the Companies Act, 2013.
Step 2: Detailed Explanation:
• Section 2(40) of the Companies Act, 2013: This section defines "financial statement" in relation to a company.
It includes:
1. A balance sheet as at the end of the financial year (not the calendar year).
2. A profit and loss account (or an income and expenditure account for non-profit companies) for the financial year.
3. A cash flow statement for the financial year (with exemptions).
4. A statement of changes in equity, if applicable.
5. Any explanatory note annexed to or forming part of any document referred to above.
• Analyzing the Statements:
(i) A profit and loss account for the financial year: This is correct.
(ii) A balance sheet as at the end of the calendar year: This is incorrect because the Act mandates the balance sheet to be prepared as at the end of the financial year (which ends on March 31st).
(iii) A statement of changes in equity, if applicable: This is correct.
(iv) An income and expenditure account in case of not-for-profit companies: This is correct as non-profits (Section 8 companies) do not prepare a profit and loss account.
Step 3: Final Answer:
Since statements (i), (iii), and (iv) are correct, Option D is the correct answer.
The question asks to identify what constitutes a "financial statement" of a company as defined under Section 2(40) of the Companies Act, 2013.
Step 2: Detailed Explanation:
• Section 2(40) of the Companies Act, 2013: This section defines "financial statement" in relation to a company.
It includes:
1. A balance sheet as at the end of the financial year (not the calendar year).
2. A profit and loss account (or an income and expenditure account for non-profit companies) for the financial year.
3. A cash flow statement for the financial year (with exemptions).
4. A statement of changes in equity, if applicable.
5. Any explanatory note annexed to or forming part of any document referred to above.
• Analyzing the Statements:
(i) A profit and loss account for the financial year: This is correct.
(ii) A balance sheet as at the end of the calendar year: This is incorrect because the Act mandates the balance sheet to be prepared as at the end of the financial year (which ends on March 31st).
(iii) A statement of changes in equity, if applicable: This is correct.
(iv) An income and expenditure account in case of not-for-profit companies: This is correct as non-profits (Section 8 companies) do not prepare a profit and loss account.
Step 3: Final Answer:
Since statements (i), (iii), and (iv) are correct, Option D is the correct answer.
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