Question

Which of these is not a function of Financial Accounting?

• A. To provide financial information to the users of the financial statements.
• B. To portray gloomy picture of the business in order to evade tax liabilities.
• C. To keep a systematic record of business transactions.
• D. To depict a true and fair view of the financial position of the business.

Answer 1

Answer: (B)

To portray gloomy picture of the business in order to evade tax liabilities.

The basic function of accounting is to record all the business transactions on the value which is actually incurred. All such transactions are further classified and summarized in such a way so that financial statements will give true and fair view of the business.

It is not at all fair to portray gloomy picture of the business in order to evade tax liabilities.