Which of the Following Statements About Financial Accounting Is CORRECT

question 93

Multiple Choice

Which of the following statements about financial accounting is CORRECT?

• A)Financial accounting is focused on planning and controlling operations.
• B)Financial accounting is forward- looking.
• C)Financial accounting is focused on detailed reports on parts of the company.
• D)Financial accounting is oriented towards helping investors make decisions.

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Definitions:

Investment

The allocation of resources, usually money, in order to earn income or profit over time.

Partial Equity Method

An accounting method used when an investing company has significant influence over, but not full control of, another company, requiring the investor to record its share of profits.

Equity Method

The Equity Method is an accounting technique used to record investments in other companies, recognizing the income earned from the investment proportional to ownership.

Dividends

Cash disbursements issued to shareholders by a company, commonly originating from the organization's earnings.