Tag: Objectives

According to IAS 1 Presentation of Financial Statements which two of the following are objectives of financial statements?

A To show the results of management’s stewardship of the resources entrusted to it
B To provide a basis for valuing the entity
C To provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions
D To facilitate comparison of financial performance between entities operating in different industries
E To assist management and those charged with governance in making timely economic decisions about deployment of the entity’s resources

Select ONE answer:

1. D & E
2. B & C
3. A & C
4. A & B

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – A and C – International Accounting Standard I (AS 1) Presentation of Financial Statements provides the objective of financial statements. It states that the objective of financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions (C). In addition, it states that the financial statements also show the results of management’s stewardship of the resources entrusted to it (A).
4. Not correct

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