Question

the primary objective of financial reporting is to provide information: (please double check selected answer)

The primary objective of financial reporting is to provide information: Multiple Choice About a firm's financing and investing activities. About a firm's management team. O About a firm's product lines That is useful in decision making.

Answer 1

Solution :

The primary objective of Financial reporting is to provide useful information to the existing and potential users of financial statements in a manner that enables them to take an informed decision with respect to the entity.

An entity's existing and Potential users are its existing and potential owner's of equity, Creditors, Investors and lenders and the like.

The information provided through Financial reporting enables an entity's existing and potential users to develop an understanding about the existing financial situation of the company. This information will enable them in deciding, if their Investment is safe with the entity. Further it will also help them in making a decision about about making further investment in the entity.

Thus the solution is Option 4 : That is useful in decision making

The other options namely

1. About a firm's financing and investing activities.
2. About a firm's management team.
3. About a firm's product lines.

are ancillary objectives of Financial Reporting.