What is the primary objective of the financial statements of a company to its users?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Help in decision making.
The primary objective of the financial statements of a company to help in decision making to its users.
Financial statements are the basic sources of information to the shareholders and other external parties for understanding the profitability and financial position of any business concern. They provide information about the results of the business concern during a specified period of time in terms of assets and liabilities, which provide the basis for taking decisions. Thus, the primary objective of financial statements is to assist users in their decision-making.