Financial Statements Are Prepared for the User

question 12

Multiple Choice

Financial statements are prepared for the user.Which of the following best describes the responsibility for the preparation of financial statements?

• A)They are the responsibility of management.
• B)They are the responsibility of external auditors.
• C)They are the responsibility of shareholders.
• D)They are the responsibility of standard setters.

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Definitions:

Check

A draft drawn on a bank and payable on demand.

Stop Payment Order

A request made to a bank by an account holder not to pay a check or payment that has been issued but not yet processed.

Poor Quality

Refers to products or services that do not meet expected standards or specifications.

Merchandise

Goods that are bought and sold in business.