The Primary Objective of Financial Reporting Is to

question 39

Multiple Choice

The primary objective of financial reporting is to

• A)determine taxable income and income tax of a business.
• B)provide management with information needed to run the day-to-day operations of a business.
• C)keep businesses from going bankrupt.
• D)provide information useful for making economic decisions.

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Definitions:

Collateral

Property or assets that are pledged as security for the repayment of a loan, subject to seizure on default.

Consensual Secured Transaction

A financial agreement where both parties agree to the deal, and collateral is provided to secure the transaction.

Debtor

An individual or corporation that owes money or a debt to another, known as the creditor.

Collateral

Assets pledged as security for the repayment of a loan, forfeitable in the event of a default.