Question

Financial accounting is primarily intended to satisfy the information needs of which stakeholders?

1) Internal stakeholders
2) External stakeholders
3) Both internal and external stakeholders
4) None of the above

Answer 1

Financial accounting is geared towards providing information to external stakeholders, particularly investors like shareholders and bondholders who need this information to make investment choices.

Step-by-step explanation:

Financial accounting is primarily intended to satisfy the information needs of external stakeholders. These stakeholders include investors such as shareholders and bondholders, who need reliable financial information to make informed investment decisions. Because these external parties are not involved in the daily management of the firm and have imperfect information, they rely on financial statements to understand the company's financial health and performance.