Answer (B) is correct . According to the FASB’s Conceptual Framework, the objectives of external financial reporting are to provide information that (1) is useful to present and potential investors, creditors, and others in making rational financial decisions regarding the enterprise; (2)?helps those parties in assessing the amounts, timing, and uncertainty of prospective cash receipts from dividends or interest and the proceeds from sale, redemption, or maturity of securities or loans; and (3)?concerns the economic resources of an enterprise, the claims thereto, and the effects of transactions, events, and circumstances that change its resources and claims thereto.
Answer (A) is incorrect because Financial reporting is not designed to measure directly the value of a business.
Answer (C) is incorrect because While rules for accruing liabilities are a practical concern, the establishment of such rules is not a primary objective of external reporting.
Answer (D) is incorrect because The objectives of financial accounting are unrelated to the measurement of stock prices; stock prices are a product of stock market forces.
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