Which of the Following Statements Is True Concerning External Users

question 75

Multiple Choice

Which of the following statements is true concerning external users of financial information?

• A)External users need detailed records of the business to make informed decisions.
• B)External users are primarily responsible for the preparation of financial statements.
• C)External users rely on the financial statements to help make informed decisions.
• D)External users rely on management to tell them whether the company is a good investment.

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Definitions:

Simple Rate Of Return

A method to evaluate an investment's efficiency by dividing the annual incremental net operating income by the initial investment cost.

Cash Operating Costs

Expenses a company incurs during its day-to-day operational activities that require cash payment.

Automating

The process of using technology to perform tasks without human intervention, often resulting in increased efficiency and reduced error.

Payback Period

The time it takes for an investment to generate cash flows sufficient to recover its initial cost.