Financial reporting refers to:
A) Profitability.
B) Ratio analysis only.
C) The application of analytical tools to general-purpose financial statements.
D) General-purpose financial statements only.
E) The communication of financial information useful for decision making.

Question

Quizplus · Accepted Answer

Financial reporting includes the communication of financial information that is useful for decision making. This information can be presented in general-purpose financial statements and analyzed using various analytical tools such as ratio analysis. However, financial reporting is not limited to just these tools and techniques. Its primary objective is to provide stakeholders with relevant and reliable information to make informed decisions. Therefore, option E is the most appropriate choice.

Financial Reporting Refers To