Which of the Following Is the Best Definition of an Internal

question 65

Multiple Choice

Which of the following is the best definition of an internal user of accounting information?

• A) Investors who use accounting information to decide whether to buy or sell stock.
• B) Creditors like banks that use accounting information to evaluate the risk of lending money.
• C) Labor unions who use accounting information to examine the ability of the company to pay increased wages and benefits.
• D) Managers who use accounting information to plan, organize, and run a business.

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Definitions:

Shares of Stock

Units of ownership interest in a corporation or financial asset, giving shareholders a claim on part of the company's assets and earnings.

Issuing Stock

The process by which a company distributes shares to investors for the first time, typically to raise capital for expansion or other corporate activities.

Corporation's Resources

The assets, both tangible and intangible, that a corporation has available for use in the production of goods or the provision of services.

Cost Concept

An accounting principle that states that all goods and services purchased by a business should be recorded at their cost price.