Accounting Information Serves a Contracting Function When It Is Used

question 128

Multiple Choice

Accounting information serves a contracting function when it is used by:

• A)creditors to manage financial agreements.
• B)government officials to regulate the business and its financial records.
• C)analysts to assess business risks.
• D)investors to vote on company policies.

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Definitions:

Tutoring Services

Professional educational services provided to individuals or small groups to improve their understanding and performance in specific subjects or skills.

Contract

A legally binding agreement between two or more parties defining the terms and conditions of a particular arrangement or transaction.

Journalize

The process of documenting business activities in a journal within the scope of accounting practices.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate years.