The Text Identifies Six Ways to Classify the Major Differences

question 21

Multiple Choice

The text identifies six ways to classify the major differences between Management and Financial Accounting. The statement "Communicate organization's financial position to external users" is an example of which of the following classes?

• A) Purpose of information
• B) Primary users
• C) Focus and emphasis
• D) Rules of measurement and reporting
• E) Time span and type of reports

---

Definitions:

Income Tax

A tax that governments impose on financial income generated by all entities within their jurisdiction.

Withholding Allowance Certificate

A form used by employees to indicate their tax status to employers, determining how much federal income tax to withhold from their earnings.

Form W-4

A U.S. tax form used by employees to indicate their tax situation to their employer, determining the amount of taxes withheld from their paycheck.

Known Liabilities

Obligations that are quantifiable, and the company is aware of, including debts and other financial responsibilities that appear on the balance sheet.