Question

Q.2 The objective of financial reporting is to provide financial information, which is useful in making decisions about providing resources to the entity, to existing and potential investors, lenders, and other creditors. What are the decisions users want to take? (6 marks)​

Answer 1

Answer:

Accounting is the vehicle for reporting financial information about a business entity to many different groups of people.

Answer 2

Answer:

The basic objective of financial reporting is to provide information useful to investors, creditors and other users in making sound investment decisions. These decisions concern the efficient allocation of investment funds and the selection among investment opportunities.