Analyzing the Objective of Financial Reporting

Indicate whether each statement a through h is true or false.

a$.$ Financial reporting focuses primarily on external users of financial statements. Answer $1$

True

b$.$ General$-$purpose financial statements are prepared primarily for internal users. Answer $2$

c$.$ Financial reporting is directly concerned with stockholders and creditors. Answer $3$

d$.$ Financial reporting requires only a balance sheet, an income statement, and a statement of cash flows, while other statements are optional. Answer $4$

e$.$ Disclosure notes are considered an integral part of financial statements. Answer $5$

f$.$ External decision makers include shareholders, bondholders, banks, and competitors. Answer $6$

g$.$ Because accrual accounting is more predictive of future performance than cash accounting, all financial statements reported follow accrual accounting. Answer $7$

h$.$ Resource allocation decisions drive the need for financial reporting.