Which of the following is the best description of the purpose of financial reporting?
A) To allow users to access to the daily detailed records of a business.
B) To help the users reach their decisions in an informed manner.
C) To provide users with an assessment of how long the company will continue as a going concern.
D) To allow users access to a list of all the individuals who owe the company money.

Question

Quizplus · Accepted Answer

The purpose of financial reporting is to provide information to users, such as investors, creditors, and management, to help them make informed decisions about the company. It includes information about the financial performance of the company, its position, and its cash flows. It does not provide daily detailed records or a list of individuals who owe the company money. While financial reporting may include an assessment of the company's ability to continue as a going concern, it is not the primary purpose.

Which of the Following Is the Best Description of the Purpose