The primary objective of financial accounting is to:

• A. Determine the market value of a company's assets
• B. Ensure compliance with tax regulations
• C. Provide useful financial information to external users for decision making
• D. Assist management in planning and controlling business operations

Answer: (C)

Verified step by step guidance

1. Understand the primary objective of financial accounting: Financial accounting is focused on providing accurate and relevant financial information to external users, such as investors, creditors, and regulatory agencies, to aid in their decision-making processes.
2. Differentiate financial accounting from other accounting types: Unlike managerial accounting, which assists management in planning and controlling operations, financial accounting is primarily concerned with external reporting.
3. Recognize the role of financial statements: Financial accounting achieves its objective by preparing financial statements, including the income statement, balance sheet, and cash flow statement, which summarize a company's financial performance and position.
4. Identify external users: External users include investors, creditors, analysts, and regulatory bodies who rely on financial accounting information to evaluate the company's financial health and make informed decisions.
5. Clarify misconceptions: Financial accounting does not aim to determine the market value of assets or ensure compliance with tax regulations directly; these are secondary considerations or objectives of other specialized fields like tax accounting or valuation.