The Best Description of the Primary Purposes of Providing Accounting

question 59

Multiple Choice

The best description of the primary purposes of providing accounting information is:

• A) to calculate the bank account balance.
• B) to enable the financial statements to be prepared.
• C) to allow the preparation of a taxation return.
• D) to assist users in making informed decisions.

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Definitions:

Marginal Disutility

The added dissatisfaction a consumer experiences from consuming an additional unit of a product or service.

Behavioral Economics

A field of economics that examines how psychological, social, cognitive, and emotional factors affect economic decisions of individuals and institutions.

Anchoring

The tendency people have to unconsciously base, or “anchor,” the valuation of an item they are currently thinking about on recently considered but logically irrelevant information.

Decision Making

The process of selecting the best course of action from several alternatives to achieve a desired goal.