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Analyzing the Objective of Financial Reporting Indicate whether each statement a through h is true or false. a . Financial reporting focuses primarily on external
Analyzing the Objective of Financial Reporting
Indicate whether each statement a through h is true or false.
a Financial reporting focuses primarily on external users of financial statements. Answer
True
b Generalpurpose financial statements are prepared primarily for internal users. Answer
c Financial reporting is directly concerned with stockholders and creditors. Answer
d Financial reporting requires only a balance sheet, an income statement, and a statement of cash flows, while other statements are optional. Answer
e Disclosure notes are considered an integral part of financial statements. Answer
f External decision makers include shareholders, bondholders, banks, and competitors. Answer
g Because accrual accounting is more predictive of future performance than cash accounting, all financial statements reported follow accrual accounting. Answer
h Resource allocation decisions drive the need for financial reporting.
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