A business's set of financial statements includes which of the following items?

The financial statements of a business provide a comprehensive overview of its financial performance and position. The correct choice includes the income statement, balance sheet, and statement of cash flows.

The income statement summarizes the revenues and expenses over a specific period, showing the operating performance of the business. This statement is crucial as it indicates whether the business made a profit or incurred a loss.

The balance sheet presents a snapshot of the company's assets, liabilities, and equity at a specific point in time. It reflects the financial position of the business, showing what it owns and owes, as well as the residual interest of the owners.

The statement of cash flows reports on the cash generated and used during a specific period, detailing the cash inflows and outflows from operating, investing, and financing activities. This is important because it provides insight into the liquidity and overall cash management of the company.

Together, these three statements provide a holistic view of the business's financial health, making the correct choice comprehensive in depicting the essential elements of financial reporting. Each component serves a different purpose and provides unique insights that are critical for stakeholders such as investors, creditors, and management.