The Primary Objective of Financial Accounting Is

question 40

Multiple Choice

The primary objective of financial accounting is

• A) to help organizations keep track of financing activities
• B) to provide external reports to help users analyze an organization's activities
• C) to help an organization define its ideas, goals, and action
• D) to help an organization to keep track of its buying and selling of resources
• E) to prepare budgets

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Definitions:

Permanent/Temporary

Categories of accounts in accounting: permanent accounts track long-term financial status, while temporary accounts track revenues, expenses, and dividends over a specific period.

Withdrawals

Money or assets taken out of a business by its owners for personal use.

Worksheet Income Statement

A simplified version of an income statement prepared within an accounting worksheet to calculate net income or loss.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, reflecting its nature in accounting.