The purpose of financial statements contained in annual reports is to
A)aid in monitoring day-to-day decisions of operations to ensure the company's strategy is followed.
B)aid external financial users in analyzing product costs for the company's segments and perform short-term planning.
C)provide information to external users for decision making.
D)communicate a company's strategic direction and controlling activities to external users.

Question

Quizplus · Accepted Answer

The purpose of financial statements contained in annual reports is to provide information to external users for decision making, such as investors, creditors, and other stakeholders. The financial statements include the balance sheet, income statement, cash flow statement, and statement of changes in equity, which provide a comprehensive view of the company's financial performance and position. The statements help external users to analyze the company's profitability, liquidity, solvency, and efficiency, and make informed decisions regarding investments, lending, and other transactions with the company.

The Purpose of Financial Statements Contained in Annual Reports Is