Which of the following is true of financial accounting information?
A) It is prepared based on cost-benefit analysis.
B) It is primarily used by managers to make internal business decisions.
C) It focuses on the past-oriented financial performance of a company.
D) It only measures the cash transactions of a company.

Question

Quizplus · Accepted Answer

Financial accounting information focuses on the past-oriented financial performance of a company by reporting historical financial data such as income statements, balance sheets, and cash flow statements. It is aimed at providing information to external stakeholders such as investors, creditors, and regulatory agencies to help them evaluate the financial health of a company. Options A, B, and D are incorrect as financial accounting is not prepared based on cost-benefit analysis, it is not primarily used by managers for internal business decisions, and it does not only measure the cash transactions of a company.

Which of the Following Is True of Financial Accounting Information