Which of the following is an objective of financial reporting by nongovernmental not-for-profit entities as established by the FASB? Financial reporting should provide information that is useful to present and potential resource providers and other users in:
A)Assessing the types of services provided and the need for those services.
B)Assessing the services provided and the entity's ability to earn a profit.
C)Making rational decisions about the allocation of resources to those organizations.
D)Assessing how managers have managed personnel.

Question

Quizplus · Accepted Answer

According to the FASB, the objective of financial reporting by nongovernmental not-for-profit entities is to provide information that is useful to present and potential resource providers and other users in making rational decisions about the allocation of resources to those organizations. Financial reporting should provide information on the entity's financial position, liquidity, and stability, as well as information on the results of operations, cash flows, and any restrictions on the entity's resources. Therefore, choice C is the best answer. Choices A, B, and D are incorrect as they do not align with the objective of financial reporting established by the FASB.

Which of the Following Is an Objective of Financial Reporting