Question

Write two objectives of financial statements.

Hint:

The primary objective of financial statements is to provide relevant and reliable information to stakeholders for decision-making.

Answer 1

Step 1: Definition of financial statements.
Financial statements are formal records of the financial activities of a business, including the income statement, balance sheet, and cash flow statement.
Step 2: Objectives of financial statements.
1. **Provide Information on Financial Performance:** Financial statements help stakeholders understand the company’s performance by showing the revenues, expenses, and profits over a period. 2. **Provide Information on Financial Position:** They provide a snapshot of the company’s assets, liabilities, and equity, helping assess its financial stability.
Step 3: Conclusion.
Thus, financial statements serve to communicate the performance and financial position of a company to its stakeholders. Final Answer: \[ \boxed{\text{1. Provide information on financial performance, 2. Provide information on financial position}} \]