CIMA BA3 · Chapter 1 · Question 2 of 10
According to the IASB Conceptual Framework for Financial Reporting, what is the objective of general purpose financial reporting?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) 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 existing and potential investors, lenders and other creditors when deciding whether to provide resources to the entity. Tax computation, legal compliance and internal control are not the stated objective, although other parties may find the information useful.
More The accounting framework and the Conceptual Framework MCQs
- Q4Under the IASB Conceptual Framework, an asset is defined as:
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- Q7Which body is responsible for developing and issuing IFRS Accounting Standards?
- Q8A business is set up as a limited liability company rather than as a sole trader. Which of the following is a consequence of this?