Financial Statements – I · Class 11 · CBSE · Commerce Accountancy
Which of the following is the primary objective of preparing financial statements according to the accounting principles?
Practice question from Financial Statements – I (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
easy · MCQ · Q-7AA8D0
Which of the following is the primary objective of preparing financial statements according to the accounting principles?
- A.To calculate the exact market value of the business enterprise
- B.To provide information about the financial performance and financial position of an enterprise to usersCorrect answer
- C.To determine the exact tax liability payable to the government
- D.To assess the personal wealth of the business owners
Solution
Financial statements are prepared to provide useful financial information about the financial performance (Profit and Loss) and financial position (Balance Sheet) to various internal and external stakeholders for decision-making.
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