The primary objective of external financial reporting is:
A)to enhance the ability of the company to acquire financial capital from external sources.
B)to accurately provide financial results for tax purposes.
C)to comply with external regulations and requirements of government and professional associations.
D)to provide useful information for decision-making,especially investors and creditors.

Question

Quizplus · Accepted Answer

The primary objective of external financial reporting is to provide useful information to investors and creditors to help them make informed decisions. While complying with external regulations and requirements is important, it is a secondary objective of financial reporting. Accuracy for tax purposes is also important but is not the primary objective. Ultimately, the goal of external financial reporting is to provide transparency and accountability for a company's financial performance.

The Primary Objective of External Financial Reporting Is