ACCA FA · Chapter 1 · Question 1 of 10
According to the IASB Conceptual Framework, what is the objective of general purpose financial reporting?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) To provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity
Explanation
The Conceptual Framework states that the objective of general purpose financial reporting is to provide information useful to the primary users - existing and potential investors, lenders and other creditors - when they make decisions about providing resources to the entity. Tax computation and internal planning are served by other, more specific reports. Legal compliance is a consequence of preparing the statements, not their objective.
More The context and purpose of financial reporting MCQs
- Q3Which of the following statements about financial accounting and management accounting is correct?
- Q4Which of the following is a feature of a limited liability company?
- Q5Which body is responsible for developing and issuing IFRS Accounting Standards?
- Q6What is the main role of the IFRS Interpretations Committee?
- Q7Which of the following statements regarding responsibility for the financial statements of a limited liability company is correct?