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An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Determine if each statement is true or false. An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit. Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operations. Users of the financial information provided by a company use that information to make capital allocation decisions. Financial statements are the principal means through which financial information is communicated to those outside an enterprise. Some generally accepted accounting principles have simply been accepted as appropriate because of their universal application rather than due to the action of an authoritative accounting rule- making body. Financial reports in the early 21st century did not provide any information about a company's soft assets. Accounting standards are now less likely to require the recording or disclosure of fair value information due to its inherent subjectivity. Users of financial accounting statements have both coinciding and conflicting needs for information of various types.
Transcribed Image Text:Determine if each statement is true or false. An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit. Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operations. Users of the financial information provided by a company use that information to make capital allocation decisions. Financial statements are the principal means through which financial information is communicated to those outside an enterprise. Some generally accepted accounting principles have simply been accepted as appropriate because of their universal application rather than due to the action of an authoritative accounting rule- making body. Financial reports in the early 21st century did not provide any information about a company's soft assets. Accounting standards are now less likely to require the recording or disclosure of fair value information due to its inherent subjectivity. Users of financial accounting statements have both coinciding and conflicting needs for information of various types.
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