The fundamental purpose of accounting standards is to improve
A)Accountants ethics.
B)Social accountability.
C)Company profits.
D)Resource allocation.

Question

Quizplus · Accepted Answer

The fundamental purpose of accounting standards is to improve resource allocation by providing users of financial statements with reliable and comparable information about an entity's financial performance and position. This information assists investors, creditors, and other stakeholders in making informed decisions about allocating resources. While promoting ethical behavior and social accountability may be important objectives of accounting standards, they are not their fundamental purpose. Company profits are not necessarily improved by accounting standards, but rather, they provide more accurate and transparent information about a company's financial performance.

The Fundamental Purpose of Accounting Standards Is to Improve