Although Accounting Has Several Specific Uses, the Overall Purpose of Accounting

question 304

Multiple Choice

Although accounting has several specific uses, the overall purpose of accounting can be summarized as

• A) to provide financial information that is useful to decision makers.
• B) to meet the legal requirements of the Financial Accounting Standards Board (FASB).
• C) to allow the government to track business activity levels.
• D) to compute the profit or loss and declared dividend of a business firm.

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Definitions:

Consumer Transactions

The purchase and sale of goods or services between a buyer, typically an individual or household, and a seller for personal use.

Consideration

In contract law, it refers to something of value exchanged by the parties involved that induces them to enter into the agreement.

Personal Defense

Strategies, methods, or actions employed by an individual to protect themselves from harm.

HDC

Stands for Holder in Due Course, a term in commercial law referring to a party who acquires a negotiable instrument in good faith and for value, thus having certain protections.