Which of the following is the primary objective of financial statements?
A) Providing managers with detailed information tailored to the managers' specific information needs.
B) Providing people outside the business organization with information about the company's financial position and operating results.
C) Reporting to the tax authority the company's taxable income.
D) Indicating to investors in a particular company the current market values of their investments.

Question

Quizplus · Accepted Answer

The primary objective of financial statements is to provide people outside the business organization with information about the company's financial position and operating results. This includes stakeholders such as investors, creditors, and regulators, who rely on financial statements to make decisions about the company's performance and potential. Financial statements are not tailored to individual managers' needs, and while they may be used for tax reporting purposes, this is not their primary objective. Additionally, financial statements may provide some indication of a company's market value, but this is not their primary objective either.

Which of the Following Is the Primary Objective of Financial