Question

Given below are two statements:
• [Statement (I):] The income generated through self-liquidating loans is sufficient to clear off the entire loan amount in the same accounting year. 
• [Statement (II):] Net income & net operating income can be calculated from balance sheet. 
In light of the above statements, choose the most appropriate answer from the options given below. 
 

• A. Both Statement (I) and Statement (II) are correct.
• B. Both Statement (I) and Statement (II) are incorrect.
• C. Statement (I) is correct but Statement (II) is incorrect.
• D. Statement (I) is incorrect but Statement (II) is correct.

Hint:

To remember the functions of farm financial statements:
- Balance Sheet: Evaluates financial position at a single point in time (Assets, Liabilities, Net Worth).
- Income Statement: Evaluates profitability over a period of time (Revenues, Expenses, Net Income).

Answer 1

The Correct Option is C