Which of the following statements is TRUE of financial accounting?
A) It provides information to investors needed for their investment decisions.
B) It provides future focused information needed for managing and delegating operations.
C) It focuses on detailed reports for parts of the company rather than the whole company.
D) It focuses on planning, directing and controlling day-to-day operations.

Question

Quizplus · Accepted Answer

Financial accounting is primarily concerned with providing information to external users, such as investors, creditors, and regulatory agencies. Its goal is to provide information that is relevant, reliable, and timely, to help users make informed decisions about investing in or lending to a company. Option B refers to managerial accounting, which provides information to internal users for managing and controlling operations. Option C is incorrect as financial accounting focuses on providing information about the entire company, not just parts of it. Option D is also incorrect as it refers to the role of management accounting in planning, directing, and controlling day-to-day operations.

Which of the Following Statements Is TRUE of Financial Accounting