Which One of the Following Statements Is Not Correct

question 4

Multiple Choice

Which one of the following statements is not correct?

• A) The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions relating to providing resources to the entity.
• B) While financial accounting presents information about what has happened in the past, management accounting is very much concerned with both the present and the future and how accounting information can be used for short-term decision making and longer-term planning.
• C) Understandability assumes that readers of financial reports have a reasonable knowledge of business and economic events in order to make sense of what they are presented with.
• D) Accounting summarises narrative data relating to past events and presents this data as information to managers and other interested parties as a basis for both decision making and control purposes.

---

Definitions:

Defined Contribution Plans

Retirement savings plans where the amount contributed to the plan is defined, but the future benefit can vary based on investment performance.

Retirement Income Risk

The risk of having insufficient funds to cover expenses in retirement, considering various factors like longevity, inflation, and healthcare costs.

Underfund Liability

The shortfall or deficit when the assets of a fund, like a pension, are insufficient to cover the obligations.

Defined Benefit Plan

A type of pension plan where retirement benefits are determined based on a formula, typically involving salary and service years.