Which of the following is the best description of the purpose of financial reporting?
A)To allow users to access 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 regulators) to help them make informed decisions about the company. It includes financial statements and disclosures about the company's financial performance, position, and cash flows. It does not necessarily include daily detailed records or lists of individuals who owe the company money. While financial reporting may indicate the company's current financial health, it is not necessarily meant to assess how long the company will continue as a going concern; this is more commonly evaluated through a separate analysis (such as a going concern assessment).

Which of the Following Is the Best Description of the Purpose