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In order to be useful, a test must be valid, that is, it must:
Assets
Resources owned by a company that have economic value and can be measured and expressed in monetary terms.
Financial Accounting
The branch of accounting that focuses on the preparation of financial statements for external use, adhering to standardized guidelines.
External Decision Makers
Individuals or entities outside of a company that use its financial information to make decisions, such as investors and creditors.
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