What is the primary objective of financial statements?

A)Providing managers with detailed information tailored to the managers' specific information needs.

B)Providing people outside the business organization with information about the company's financial position and operating results.

C)Reporting to the Internal Revenue Service the company's taxable income.

D)Indicating to investors in a particular company the current market values of their investments.

QUESTION #2)

Retained earnings is:

A)The positive cash flows of a company.

B)Net worth of a company.

C)The owners' equity that has accumulated as a result of profitable operations.

D)Equal to the total assets of a company.

3 Answers

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  • Anonymous
    9 years ago
    Favorite Answer

    1 - B

    2 - C

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    Just as an aside, the retained earnings account is NOT like a cash account that an entity can withdraw money from - it's just an account that keeps a historical record of the profits (OR LOSSES) that a business entity has incurred during the existence of the business entity. Some people seem to think it's a cash account for some reason. It isn't. As my friend Jennifer would state "I'm just sayin . . ." LOL

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  • 3 years ago

    Primary Objective Of Financial Reporting

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  • 5 years ago

    This Site Might Help You.

    RE:

    What is the primary objective of financial statements?

    A)Providing managers with detailed information tailored to the managers' specific information needs.

    B)Providing people outside the business organization with information about the company's financial position and operating results.

    C)Reporting to the Internal Revenue Service the...

    Source(s): primary objective financial statements: https://shortly.im/sYgUX
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