The primary objective of financial reporting is to provide informationa. useful for making investment and creditdecisions.b. on the cash flows of a company.c. about the profitability of an enterprise.d. to the federal government.

The primary objective of financial reporting is to provide informationa. useful for making investment and creditdecisions.b. on the cash flows of a company.c. about the profitability of an enterprise.d. to the federal government.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The primary objective of financial reporting is to provide information
a. useful for making investment and credit
decisions.
b. on the cash flows of a company.
c. about the profitability of an enterprise.
d. to the federal government.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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