Which of the Following Statements Is True Concerning External Users

question 75

Multiple Choice

Which of the following statements is true concerning external users of financial information?

• A)External users need detailed records of the business to make informed decisions.
• B)External users are primarily responsible for the preparation of financial statements.
• C)External users rely on the financial statements to help make informed decisions.
• D)External users rely on management to tell them whether the company is a good investment.

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Definitions:

Common Share

A type of security that represents ownership in a corporation, entitling the holder to vote at shareholders' meetings and to receive dividends.

Syndicate

A group of underwriters formed to reduce the risk and help to sell an issue.

Group of Underwriters

A team of financial institutions or individuals that jointly take on the risk of issuing new securities by purchasing them from the issuer and selling them to the public.

Reduce Risk

Strategies and measures employed by individuals or companies to minimize the exposure to financial loss or operational failures.