19A2 - Advanced Financial Accounting - Introduction

Which of the following is the general purpose of financial statements?

• Provide financial reporting information to a wide variety of users

• Provide the most useful information possible at the least cost

• All of the above

• None of the above

What is the purpose of information presented in notes to the financial statements?

• To correct improper presentation in the financial statements.

• To provide disclosure required by generally accepted accounting principles.

• To present management’s responses to auditor comments.

• To provide recognition of amounts not included in the totals of the financial statements.

International Financial Reporting Standards (IFRS) developed by:

• FASB

• AICPA

• IASB

• SEC

Objective of financial reporting is provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions in their capacity as (a)  

(a)   are interested in assessing the company’s ability to generate net cash inflows and management’s ability to protect and enhance the capital providers’ investments.