Which of the following is most likely not an objective of financial statements?
- To provide information about the performance of an entity.
- To provide information about the financial position of an entity.
- To provide information about the users of an entity’s financial statements.
Solution
Solution
C is correct. Financial statements provide information, including information about the entity’s financial position, performance, and changes in financial position, to users. They do not typically provide information about users.
CAN SOMEONE PLEASE EXPLAIN THE SOLUTION
So first of all you have to understand the difference between the financial reporting & financial statement analysis
Financial reporting:-
It play the role to provide the information about the company position (balance sheet) company performance (income statement & cashflow statement) & changes in financial position ( statement of changes in equity).So option A & B is related to financial reporting
Financial statement analysis:-
The role of the financial statement analysis is to use the information provided by the FR & combine with the other source of income to decide whether to invest in the equity of that company or to lend the money to the firm
So Option C is talking about FSA
So answer is option C