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Which of the following best describes why a firm produces financial statements?

A) to use as a tool when planning future investments within a firm

B) to increase the intrinsic value of a firm

C) to provide a means for interested outside parties such as creditors to obtain information about a firm, with an overview of the short- and long-term financial condition of a business

D) to show the daily activities a firm has undertaken in the previous financial year, and what activities are planned for the near future

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Question added by Sultan Alghamdi
Date Posted: 2016/02/11
Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Option C is the right answer.

Mahmoud Hamid
by Mahmoud Hamid , Finance Manager , Corp. Fin.

I will go with no (C) to provide a means for interest outsiders such as creditors and investors to obtain information about the firm, with an overview of the short/ long-term finanical conditions.

Zehab Osman
by Zehab Osman , Accountant , Aldar Consultancy Co.

C------------------------------------------------------------

هيثم ناجى
by هيثم ناجى , محاسب اول , الفيوم لصناعة السكر

the third option C is correct answer

Asif ahmed
by Asif ahmed , Accountant , M.G. Brothers Real Estates Pvt ltd

A to use as a tool when planning future investments within a firm

i wiil go with (C) & (D).

 

C) to provide a means for interested outside parties such as creditors to obtain information about a firm, with an overview of the short- and long-term financial condition of a business

D) to show the daily activities a firm has undertaken in the previous financial year, and what activities are planned for the near future

 

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