The primary objective of financial reporting is to

Question

Quizplus · Accepted Answer

The primary objective of financial reporting is to provide information useful for making economic decisions. This information helps investors, creditors, and other stakeholders to understand the financial position of a business and to make informed decisions regarding investing or lending money to the business. Financial reporting also helps regulators and government entities to enforce laws and regulations related to financial reporting and to monitor the overall health of the economy. While financial reporting may provide information that is useful to management, this is not its primary objective. Similarly, financial reporting may be used to determine taxable income and income tax, but this is not its primary objective. Finally, financial reporting may be helpful in preventing bankruptcy, but this is not its primary objective.

The Primary Objective of Financial Reporting Is to