The purpose of financial accounting is ___________?
Correct answer: A. communicating company position to investors
- A. communicating company position to investors
- B. helping managers make decisions
- C. future oriented
- D. single person orientation
Explanation
Financial accounting provides standardized information about a company's financial position and performance to external users, especially investors and creditors. Helping managers make internal decisions is primarily the role of management accounting.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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128 free Financial Statements MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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