Which of the following statements is CORRECT?
A) Assets other than cash are expected to produce cash over time,and the amounts of cash they eventually produce should be exactly the same as the amounts at which the assets are carried on the books.
B) The primary reason the annual report is important in finance is that it is used by investors when they form expectations about the firm's future earnings and dividends and the riskiness of those cash flows.
C) The annual report is an internal document prepared by a firm's managers solely for the use of its creditors/lenders.
D) The four most important financial statements provided in the annual report are the balance sheet,income statement,cash budget,and the statement of stockholders' equity.
E) Prior to the Enron scandal in the early 2000s,companies would put verbal information in their annual reports along with the financial statements.That verbal information was often misleading,so today annual reports can contain only quantitative information-audited financial statements.

Question

Quizplus · Accepted Answer

The annual report is important in finance because it provides important information about the firm's financial performance and future prospects, which investors use to evaluate the firm's potential for generating earnings, dividends, and growth. The report includes quantitative information such as financial statements as well as qualitative information such as management's discussion and analysis, which can provide insight into the firm's strategy, market conditions, and risk factors.

Which of the Following Statements Is CORRECT