The Principal Function of Financial Statements Is To

question 73

Multiple Choice

The principal function of financial statements is to:

• A)convey confidential information to the board of directors.
• B)accurately project future cash flows of a company.
• C)convey information to outside investors.
• D)guarantee an accurate accounting record.

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Definitions:

Strategic Planning

Strategic planning is the process of defining a strategy or direction and making decisions on allocating resources to pursue this strategy, including capital and people, to reach identified goals.

Alternatives

Other options or courses of action that are available in a particular situation, typically considered when making decisions.

Competitive Advantage

The attributes or circumstances that allow an organization to produce goods or services more effectively than its competitors.

Strategy

A plan of action designed to achieve a long-term or overall aim.