Question

A general purpose financial statements means:

		a financial report prepared by the company for the needs of any user
		a financial report intended to meet the information needs of preparers
		a financial report intended to meet the information needs of users who are able to command the preparation of reports to satisfy all of their information needs
		a financial report intended to meet the information needs of users who are unable to command the preparation of special purpose reports

Answer 1

A general Purpose financial statements means:

c) A financial report intended to meet the information needs of users who are able to command the Preparation of reports to satisfy all of their information needs.

Justification:

Financial Statements contain absolute figures of Liabilities, Assets,Revenues,Expenses and Profit or loss of an enterprise. It shows financial position of an organisation.Various parties have interest in the financial statements of a company due to variuos reasons. Different users look at the same financial statement from different angles for example a shareholder would be interested in the profitability status of organisation,a creditor would be concerned about the liquidity position of organisation, Lenders are interested to judge the financial soundness of the business to repay their debts at maturity.Therefore financial statement intended to meet the need of Investors, Creditors, Employees, Taxation Authorities,Consumer organisations.

Why Not a)

Financial statements are not financial reports prepared for any single user it is for all.

Why Not b)

Financial statements not only meet need of preparers but also of many other users like investors,employees,taxation authority.

Why Not D)

Here in this option it is written that users are unable to unable to command the preparation of special purpose report..while it is not so. users use the information from financial statements and interpret it according to their use.