Which of the Following External Users Would Require Financial Statement

question 8

Multiple Choice

Which of the following external users would require financial statement information,specifically information concerning ability to meet financial obligations?

• A) Governmental units
• B) Lenders
• C) Vendors
• D) Employees
• E) Customers

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Definitions:

Spending Variance

The variance between the budgeted and the actual expenditure in a given category or time frame.

Planning Budget

A budget prepared for a future period that outlines expected revenues, expenses, and other financial activities to guide decision-making.

Equipment Depreciation

This refers to the accounting process of allocating the cost of physical assets over their useful lives to account for the loss in value.

Spending Variance

The difference between the actual expenditure and the budgeted amount.