Which of the following is a fundamental way in which financial accounting numbers are useful?
A)They can predict the way the stock price will behave.
B)They are used to assess the quality of a company's products.
C)They can be used to predict a company's future earnings.
D)They identify the effect of inflation on the value of company's assets.

Question

Quizplus · Accepted Answer

Financial accounting numbers provide information about a company's past performance, which can then be used to predict future earnings potential. However, they do not predict stock price behavior or assess product quality, and while they may reflect the effects of inflation on assets, this is not a fundamental way in which they are useful.

Which of the Following Is a Fundamental Way in Which