Why should an entrepreneur keep financial information?
Answer and explanation
Correct answer: To understand income expenses savings and profit
Accurate financial records show money received, costs paid, assets, liabilities, cash position, and the resulting profit or loss. This information helps the entrepreneur control expenses, plan cash needs, price more sensibly, meet obligations, evaluate performance, and make decisions about saving or investment. Records are not maintained to confuse customers or reduce demand. Therefore, A is correct.
Frequently asked questions
What is the correct answer to this question?
To understand income expenses savings and profit
Why is this the correct answer?
Accurate financial records show money received, costs paid, assets, liabilities, cash position, and the resulting profit or loss. This information helps the entrepreneur control expenses, plan cash needs, price more sensibly, meet obligations, evaluate performance, and make decisions about saving or investment. Records are not maintained to confuse customers or reduce demand. Therefore, A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Concept, nature and importance of business finance.
