The Primary Objective of Financial Reporting Is to Provide Information

question 29

Multiple Choice

The primary objective of financial reporting is to provide information:

• A)to the federal government.
• B)about the profitability of the business.
• C)regarding the cash flows of the business.
• D)useful for making investment decisions and for assessing management's stewardship.

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Definitions:

Albumin

A type of protein in the blood plasma responsible for maintaining osmotic pressure in the blood vessels and transporting substances.

Plasma Protein

Proteins found in blood plasma that perform many roles, including clotting, defense against disease, and transport of substances.

Osmosis

The spontaneous movement of solvent molecules through a semi-permeable membrane from a region of low solute concentration to a region of high solute concentration to equalize the concentrations on both sides of the membrane.

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance that is the main constituent of Earth's hydrosphere and the fluids of all known living organisms.