Objectives of financial statements, Accounting Basics

Assignment Help:

OBJECTIVES OF FINANCIAL STATEMENTS

The fundamental purpose of financial statements according to AICPA is 'to offer qualitative financial information concerning to the business enterprise that is helpful to statement users, mainly owners and creditors in making economic choices. Apart from this, the other key objectives are :

1)    To offer information about the economic actions of the enterprise to several outer groups who or else have no access to such information.

2)    To offer useful information to investors and creditors in taking decisions concerning to investment and lending.

3)    To offer information to potential investors in estimateting the earning power of the enterprise.

4)    To offer economic information to the owners to moderator the management on its stewardship of the resources of the enterprise and the accomplishments of the corporate objectives.

5)    To offer information which allows the investors to evaluate the concert with like other undertakings and take suitable decisions regarding retention or disinvestments of their holdings.

6)    To offer information concerning accounting policies and contingent liabilities of the enterprise as these have a excepting in predicting, comparing and evaluating the earning power of the enterprise.


Related Discussions:- Objectives of financial statements

Accounting Concept, What is the implication of applying accounting concepts...

What is the implication of applying accounting concepts wrongly

Neutrality of accounting information, Q. Neutrality of accounting informati...

Q. Neutrality of accounting information? The Neutrality signifies that the accounting information must be free of measurement method bias. The primary concern must be relevance

What is net realizable value, Q. What is Net realizable value? Companie...

Q. What is Net realizable value? Companies must not carry goods in inventory at more than their net realizable value. Net realizable value is the approximate selling price of a

Case, contributed her $10000 in exchange for $1000 of the shares. this was ...

contributed her $10000 in exchange for $1000 of the shares. this was deposited into a new corporate bank account she set up with TD canada trust

Show sales returns and allowances, Q. Show Sales returns and allowances? ...

Q. Show Sales returns and allowances? Sales returns and allowances Merchandising companies typically permit customers to return goods that are defective or unsatisfactory for a

Reconsolidation, In the process of giving information from a business to a ...

In the process of giving information from a business to a prospective buyer, an accountant is requesting a Reconsolidation for last December. What is that?

On june 1st, On June 1st, Green Pea, Inc. purchased $1,200 worth of supplie...

On June 1st, Green Pea, Inc. purchased $1,200 worth of supplies on account. How does this transaction affect Green Pea's accounts? a. Increase supplies and accounts payable by $

Describe about adjunct account, Q. Describe about adjunct account? The ...

Q. Describe about adjunct account? The Transportation-In account files the inward freight costs of acquiring merchandise. Transportation-In is an adjunct account in that it is

State unemployment tax, State unemployment tax This is referred to as S...

State unemployment tax This is referred to as SUTA (State Unemployment Tax Act). The taxes are paid to the state in which employer conducts business. This rate varies from stat

Describe about ledger, Q. Describe about ledger? A ledger (general ledg...

Q. Describe about ledger? A ledger (general ledger) is the absolute collection of all the accounts of a company. The ledgers are feasibly in a bound volume in, loose-leaf form

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd