Which Statement Is Correct

question 68

Multiple Choice

Which statement is correct?

• A)Financial reports are prepared for internal users whereas management reports are prepared for external users.
• B)Financial reports are produced at more frequent intervals than management reports.
• C)Financial reports reflect past performance whereas management reports are concerned with the future as well as the past.
• D)Financial reports provide more forecast data than management reports.

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Definitions:

Operating Income

The revenue accrued from a firm's foundational business activities, prior to the removal of interest and tax charges.

Fixed Costs

Expenses that do not vary with production volume, such as rent, salaries, and insurance premiums.

Zero Profit

A situation where a business's revenues exactly match its expenses, resulting in no net profit.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit contributes to covering fixed costs.