BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to show the value of shares in the company
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to provide information on business activities to interested users
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to help management to plan its business activities
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to show managers the results of their departments
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Detailed explanation-1: -The main objective of accounting is to keep a systematic record of financial transactions which helps the users to understand the day to day transactions in a systematic manner so as to gain knowledge about overall business.
Detailed explanation-2: -The primary objective of accounting standards is to harmonize the different accounting policies.
Detailed explanation-3: -Accounting information has an impact on decision making by helping stakeholders, creditors and other users to evaluate past and future events. Thus, it confirms or corrects pre-decided expectations. The type, nature, and materiality affect the relevance of information.
Detailed explanation-4: -The objective of financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions in their capacity as capital providers.