What Is the Major Objective of Financial Reporting

question 35

Multiple Choice

What is the major objective of financial reporting?

• A) Provide information that is useful to management in making decisions.
• B) Provide information that clearly portray nonfinancial transactions.
• C) Provide information that is useful to present and potential equity investors, lenders, and other creditors in making decisions..
• D) Provide information that excludes claims to the resources.

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Definitions:

Stock Repurchase

A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares.

Continuing Shareholders

Continuing shareholders are individuals or entities that retain their shares in a company through various corporate actions or transactions, maintaining their stake in the company.

Sold

The act of transferring ownership of an asset or security from a seller to a buyer in exchange for money or equivalent.

Retained Earnings

Profits kept by a corporation for reinvestment in its operations, rather than being distributed to shareholders as dividends.