A Possible Limitation of Accounting Information Is That Accounting Information

question 26

Multiple Choice

A possible limitation of accounting information is that accounting information:

• A) can only be used by bankers.
• B) is relevant depending on the needs of users.
• C) does not report in money terms.
• D) relates to past information.

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Definitions:

Operating Activities

Business actions directly involved in the production and delivery of goods and services, as reflected in the cash flow statement.

Current Accounts

A type of demand deposit account that allows withdrawals and deposits, typically used by businesses for their frequent money transactions.

Financing Activities

Transactions and events where cash flow comes into the company to help in financing its operations or to fund the expansion of its business.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not included in cash equivalents.