Which of the Following Is Not an Economic Consequence of Financial

question 23

Multiple Choice

Which of the following is not an economic consequence of financial reporting?

• A)Financial information can affect the distribution of wealth among investors.More informed investors,or investors employing security analysts,may be able to increase their wealth at the expense of less informed investors.
• B)Financial information can affect the level of risk accepted by a firm.Focusing on short-term,less risky projects may have long-term detrimental effects.
• C)Financial information can affect the rate of capital formation in the economy and result in a reallocation of wealth between consumption and investment within the economy.
• D)Financial information can affects the allocation of psychic income among investors.

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Definitions:

Income Statement

A report detailing a corporation's earnings and expenditures throughout a particular time frame, leading to either a profit or a deficit.

Accounts Closed

The process of zeroing out balances in temporary accounts and transferring their balances to permanent accounts at the end of an accounting period.

End of Period

A point in time that marks the conclusion of a reporting period, such as a fiscal quarter or year, used for financial reporting and analysis.