Which of the Following Is Not an Objective of Financial

question 66

Multiple Choice

Which of the following is not an objective of financial reporting?

• A)To reflect prospective cash receipts to investors and creditors.
• B)To reflect prospective cash flows to an enterprise.
• C)To reflect resources and claims to resources.
• D)To reflect current stock prices and information concerning stock markets.

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Definitions:

Expected Earnings

The forecasted income of a company, often used by investors to gauge the company's future profitability.

Common Shareholders' Equity

The amount of money that would be returned to shareholders if all the company's assets were liquidated and all its debts paid off.

Replacement Cost

The cost to replace an asset with another of similar kind and quality at current prices, without deduction for depreciation.

Book Value Per Share

A financial measure that calculates the per share value of a company based on common shareholders' equity in the business.