How does accounting help the capital allocation process attract investment capital?
A) By providing timely, relevant information.
B) By encouraging innovation.
C) By promoting productivity.
D) By providing timely, relevant information and by encouraging innovation.

Question

Quizplus · Accepted Answer

Accounting helps the capital allocation process attract investment capital by providing timely, relevant information to potential investors. This information includes financial statements, such as balance sheets, income statements, and cash flow statements, which provide insight into the financial health and performance of a company. By providing this information, accounting helps investors make informed decisions about where to allocate their capital, which can ultimately lead to increased investment in the company.

How Does Accounting Help the Capital Allocation Process Attract Investment