The correct answer is: D. 1, 2 and 4.
Statement 1 is true because financial statements are only interim reports. They are not a complete picture of a company’s financial position, and they should not be used as the only basis for making investment decisions.
Statement 2 is true because financial statements are prepared on the basis of realisable values. This means that they are based on the estimated future cash flows that a company expects to generate from its assets.
Statement 3 is true because the preparation of financial statements is not an ultimate aim. It is a means to an end, and the ultimate aim is to provide information that is useful for decision-making.
Statement 4 is true because certain assumptions are necessary to prepare financial statements. For example, companies must assume that they will continue to operate as a going concern, and they must estimate the useful lives of their assets.
Therefore, the only combination of statements that consists of all true statements is D. 1, 2 and 4.