Over Time,a Number of Objectives Have Been Attributed to Information

question 9

Multiple Choice

Over time,a number of objectives have been attributed to information provided within financial statements.Which of the following is not an objective of financial statements?

• A) To enable outsiders to assess the stewardship of management.
• B) To provide information to users that is useful for making and evaluating decisions about the allocation of scarce resources.
• C) To enable reporting entities to demonstrate accountability between the entity and those parties to which the entity is deemed to be accountable.
• D) To help managers to maximise their own wealth and the wealth of the organisation.

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Definitions:

Selling Price

The amount a customer pays to purchase a product or service from a business.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, due to fixed costs in a company's structure.

Net Income

This is the total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Variable Expenses

Costs that change in proportion to the level of activity or production volume.