What is the primary objective of the financial statements of a company to its users?
Options:
Help in getting loans
Help in decision making
Help in earning cash flow
All of above
Correct Answer:
Help in decision making
Explanation:
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.
