The Purposes of Financial Accounting Include

question 14

Multiple Choice

The purposes of financial accounting include

• A) Both providing information for economic decisions AND tracking how much income shareholders earned
• B) Providing information for economic decisions but not tracking how much income shareholders earned
• C) Tracking how much income shareholders earned but not providing information for economic decisions
• D) Giving information regarding stewardship, but neither providing information for economic decisions nor tracking how much income shareholders earned

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Definitions:

Below-Average Earnings

refer to income levels that are lower than the average earnings within a specified population or employment sector.

Social Security System

A government program that provides financial assistance to people with inadequate or no income, especially the elderly and disabled.

Highest-Valued Alternative

The best next option forgone as a result of making a particular decision, often related to the concept of opportunity cost.

Production Possibilities Curve

A curve that outlines all possible combinations of total output that could be produced, assuming (1) a fixed amount of productive resources, (2) a given amount of technical knowledge, and (3) full and efficient use of those resources. The slope of the curve indicates the amount of one product that must be given up to produce more of the other.