Which of the following best describes why firms produce financial statements?
A)to provide interested parties, both inside and outside the company, with an overview of the short- and long-term financial condition of a business
B)to show what activities the company has undertaken in the previous financial year, and what activities are planned for the near future
C)to provide a means of enticing new investors to a firm
D)to use as a tool when planning future investments within the firm

Question

Quizplus · Accepted Answer

Financial statements are produced to provide interested parties, both inside and outside the company, with an overview of the short- and long-term financial condition of a business. This includes information such as revenues, expenses, profits or losses, and assets and liabilities. The information provided in financial statements helps stakeholders make informed decisions about their involvement with the company.

Which of the Following Best Describes Why Firms Produce Financial