Indicate some of the users and the information they are most directly concerned
with in economic decision-making
Answers
a) Objectives of Financial Reporting 1) To provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit, and similar decisions. 2)To provide information to help present and potential investors and creditors and other users in assessing the amounts, timing and uncertainty of prospective cash receipts from dividends or interest and the proceeds from the sale, redemption or maturity of securities or loans. 3) To provide information about the economic resources of an enterprise, the claims on those resources and the effects of transactions, events and circumstances that change its resources and claims to those resources. b) Other means are there of communicating information, besides financial statements? To communicate financial information, multidimensional graphics can also be used. This graphic technique helps individuals understand the relationships between financial variables and allow them to identify changes in the trend of firm’s financial conditions more quickly than statistical models. Aside from this, financial reporting may take various forms like supplementary schedules in the corporate annual report,management's forecasts, and descriptions of a company's social or environmental impact. (c) Indicate some of the users and the information they are most directly concerned with in economic decision-making. The financial statements are used by different categories of people for different...