Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 1 - Financial Accounting and Accounting Standards - Review and Practice - Concepts For Analysis - Page 23: CA1-2


1. False 2.False. 3.False 4. True.

Work Step by Step

1. On top of providing decision-useful information about future cash flows, management also is accountable to investors for the custody and safekeeping of the company’s economic resources and for their efficient and profitable use; however, this is not considered an objective. 2. The main objective of financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions in their capacity as capital providers. 3. The Generally Accepted Accounting Principles follow the same due process procedures for interpretations and standards. 4. Financial reporting uses an entity rather than a proprietary approach in determining what information to report.
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