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Which of the follow statements regarding the primary objective of financial reporting is correct

Which of the follow statements regarding the primary objective of financial reporting is correct? 

A. To be useful information must follow the Generally Accepted Accounting Principles which are created and governed by the Securities and Exchange Commission 

B. Information that is faithfully represented is complete, neutral, and free from error 

C. Relevant information ensures that users of the information will make the correct decisions 

D. The primary objective of financial reporting is to provide information useful for the acquisition of long-term assets. 


Adventures Unlimited Company distributes cash dividends. How does this transaction affect the accounting equation? 

A. The assets, liabilities, and equity remain the same. 

B . The assets increase and liabilities decrease. 

C. The assets decrease and equity increases. 

D. The assets decrease and equity decreases.

business   accounting   
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Answer #1

Answer:

1.C.Information that is faithfully represented is complete , neutral and free from error.

Financial statements should have a true and fair view following all accounting standards,principles,Corporate law requirements GAAP requirements .

2.D.The assets decrease and equity decreases

Distribution of Cash dividends has following entry:

Retained Earnings a/c              Dr.

        To Cash

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