What is the objective of financial reporting? Provide information that clearly portrays nonfinancial transactions. Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors. Provide information that excludes claims to the resources. Provide information that is useful to management in making decisions.

Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors.

Explanation:

Financial reporting refers to the presentation and disclosure of financial information of an entity to the public, investors, lenders and other stakeholder.

Financial reporting is carried out by reporting financial statements (balance sheet, income statements), statement of cash flows and other relevant/necessary disclosures, notes as required by law or statute or which are essential for better comprehension of such financial information.

Such information helps lenders to know the financial health of the entity, helps investors to decide whether it would be beneficial to invest in the entity, assures government of the compliance of laws by the entity, etc.