Which of the Following Is an Objective of Financial Reporting

question 16

Multiple Choice

Which of the following is an objective of financial reporting by business enterprises?

• A)Financial reporting should provide assurance that all liabilities of business enterprises will be paid.
• B)Financial reporting should show the timing and amount of future cash dividends to potential investors.
• C)The primary focus of financial reporting is information about the assets of the entity.
• D)Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and changes in those resources and claims to them.

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Definitions:

Quantity Produced

The total number of units of a product made by a business within a specific period.

Inputs

All the resources that go into a business.

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs to a production process for manufacturing, finishing, or fabrication.

Producing Product

The process of creating, manufacturing, or assembling goods and services for sale to consumers.