State the Basic Objective of Financial Reporting and Explain Which

question 14

Essay

State the basic objective of financial reporting and explain which groups might benefit if this objective is met.

---

Definitions:

Correcting Entries

Journal entries made to amend previously recorded transactions that were entered incorrectly.

Adjusting Entries

Journal entries made in preparation for financial statements to allocate income and expenses to the period in which they actually occurred.

Balance Sheet Account

An account found on the balance sheet which can include assets, liabilities, and equity accounts.

Income Statement Account

An account found in the income statement that records revenues, expenses, gains, and losses.