Financial reporting objectives state that financial statements should be comprehensible to
A)Accounting experts.
B)Those who have a reasonable understanding of business and economic activities and are willing to study the information.
C)Large investors.
D)The average investor with average communication skills and average training and experience.

Question

Quizplus · Accepted Answer

Financial reporting objectives aim to provide useful and understandable information to the users of the financial statements. While accounting experts may have a deeper understanding of the information, the objective is to make the information comprehensible to those who have a reasonable understanding of business and economic activities and are willing to study the information. The objective is not limited to large investors or the average investor with average communication skills and average training and experience, but rather to all users who may benefit from the information. Therefore, the best choice is B.

Financial Reporting Objectives State That Financial Statements Should Be Comprehensible