The Two Classes of Decision Makers Who Rely on Accounting

question 59

Multiple Choice

The two classes of decision makers who rely on accounting information are:

• A)Managers and employees.
• B)Stockholders and creditors.
• C)Governmental agencies and owners.
• D)Decision makers inside the firm and decision makers outside the firm.
• E)Auditors and executives.

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Definitions:

Financial Leverage

The application of borrowed resources to escalate the anticipated yield of an investment.

EPS

Earnings Per Share; a company's profit divided by its number of outstanding shares of common stock.

Financially Distressed

The state of a company or individual facing financial difficulty, often unable to meet debt obligations or manage cash flow effectively.

Bankruptcy

A legal process where individuals or businesses unable to meet their debt obligations can seek relief from some or all of their debts.