The Objectives of Financial Reporting Include All of the Following

question 37

Multiple Choice

The objectives of financial reporting include all of the following except to provide information that

• A)is useful to the Internal Revenue Service in allocating the tax burden to the business community.
• B)is useful to those making investment and credit decisions.
• C)is helpful in assessing future cash flows.
• D)identifies the economic resources (assets), the claims to those resources (liabilities), and the changes in those resources and claims.

---

Definitions:

Normal Balance

The side of an account, whether debit or credit, where increases in the account are recorded, determined by the account's classification in the accounting equation.

Capital Account

A national account that shows the net change in asset ownership for a country.

Revenue Account

An account that tracks the income earned from a company's primary operations.

Liability Account

An accounting record that captures the amount a company owes to others, such as loans, accounts payable, or mortgages.