The Purpose of Financial Statements Contained in Annual Reports Is

question 112

Multiple Choice

The purpose of financial statements contained in annual reports is to

• A)Communicate information about the financial health of a company to external users.
• B)Assist internal managers in making pricing decisions.
• C)Both communicate information about the financial health of a company to external users and assist internal managers in making pricing decisions.
• D)Neither communicate information about the financial health of a company to external users nor assist internal managers in making pricing decisions.

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Definitions:

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services to businesses and individuals.

Federal Reserve

The central banking system of the United States responsible for setting monetary policy, including the manipulation of interest rates to control inflation and stabilize the currency.

Deposits

Sums of money placed into financial institutions for safekeeping, which can earn interest over time depending on the type of account.

Minimum Tick Size

The smallest allowable increment by which the price of a financial instrument can move on the trading platform.