ECONOMICS

Detailed explanation-1: -Answer: The accounting records and financial statements prepared from these records are based on historical costs. The financial statements, by nature, are summaries of the items recorded in the business and these statements are prepared periodically, generally for the accounting period.

Detailed explanation-2: -The financial statements of a company reflect a true picture of its financial performances. They depict not only profits and losses, but also assets and liabilities. It is only at the end of all accounting processes that we can generate these statements.

Detailed explanation-3: -Another concern is that financial statements are entirely historical in nature, and so can be misleading when used to project the future results of a business.

Detailed explanation-4: -The information provided by financial statements is in summarized nature.