Financial accounting is designed primarily for decision makers within the company.

Question

BlackTom AI · Accepted Answer

The question presents a statement about financial accounting: "Financial accounting is designed primarily for decision makers within the company." 
Option 1: True. This would claim that financial accounting is mainly intended for internal company decision makers. While financial accounting does serve internal managers for planning and control, its primary purpose is typically to provide information to external users—such as investors, creditors, regulators, and tax authorities—who are outside the company. Hence labeling it as primarily for internal decision makers would be inaccurate. 
Option 2: False. This correctly reflects the conventional view that financial accounting focuses on external reporting, providing standardized financial statements (like the income statement, balance sheet, and cash flow statement) to external stakeholders. The information is often less detailed and more regulated to ensure comparability and accountability, which is characteristic of external reporting rather than solely internal decision support. 
In summary, the assertion in Option 1 overstates the internal focus, while Option 2 correctly identifies the external orientation of financial accounting. The distinction hinges on the primary audience and the regulatory framework governing financial statements, rather than on internal versus external use alone.

Financial accounting is designed primarily for decision makers within the company.

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