The primary objective of financial accounting is
A) to help organizations keep track of financing activities
B) to provide external reports to help users analyze an organization's activities
C) to help an organization define its ideas, goals, and action
D) to help an organization to keep track of its buying and selling of resources
E) to prepare budgets

Question

Quizplus · Accepted Answer

The primary objective of financial accounting is to provide external reports that help users analyze an organization's activities. This includes financial statements such as the balance sheet, income statement, and cash flow statement, which provide information on an organization's financial performance and position. The purpose of these reports is to help investors, creditors, and other external stakeholders make informed decisions about the organization. While financial accounting does involve keeping track of financing activities and buying and selling of resources, these are secondary objectives that support the primary objective of external reporting. Financial accounting is not directly involved in helping an organization define its ideas, goals, and action or in preparing budgets.

The Primary Objective of Financial Accounting Is