Question

1. The primary objective of financial accounting is: A. To serve the decision-making needs of internal users. B. To provide financial statements to help external users analyze an organization's activities. C. To monitor and control company activities. D. To provide information on both the costs and benefits of looking after products and services. E. To know what, when, and how much to produce

Answer 1

The main goal of financial accounting is to provide financial statements for external users to analyze an organization's financial activities. It encompasses recording and presenting financial information that is critical for investors and others to make economic decisions. Moreover, financial institutions are integral in managing funds and facilitating economic transactions.

Step-by-step explanation:

The primary objective of financial accounting is B. To provide financial statements to help external users analyze an organization's activities. Financial accounting involves the recordation, summarization, and presentation of a company's financial health. The prepared financial statements serve as vital tools for external users such as investors, creditors, and regulatory authorities to make informed decisions. Financial institutions play a crucial role in the economy by offering accounts for money management and facilitating transactions between savers and borrowers. It is important to understand the implications of borrowing, the use of bonds, investments in stocks, and how businesses choose between different sources of financial capital. Financial institutions affect both households and businesses by determining the allocation of savings through interest rates and managing risk, which are essential for capital formation and ensuring the most productive use of resources.

Answer 2

B. To provide financial statements to help external users analyze an organization's activities.

Step-by-step explanation:

Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP).

Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. These includes balance sheet, statement of retained earnings and income statement.

The primary objective of financial accounting is to provide financial statements to help external users such as creditors, investors, potential clients, etc., analyze an organization's activities.