The primary objective of financial accounting is:
A)To serve the decision-making needs of internal users
B)To provide financial statements to help external users analyze and interpret an organization's activities
C)To monitor and control company activities
D)To provide information on both the costs and benefits of managing products and services
E)To know what,when and how much to produce

Question

Quizplus · Accepted Answer

The primary objective of financial accounting is to provide financial statements that help external users analyze and interpret an organization's activities. The external users include investors, creditors, analysts, and regulators who rely on financial statements to make decisions. Financial accounting provides standardized data in the form of financial statements such as income statement, balance sheet, and cash flow statement, which provide valuable insight into the financial performance and position of an organization. Internal users such as managers and employees also use financial accounting information, but it is not the primary objective.

The Primary Objective of Financial Accounting Is