External Users of Financial Information

question 171

Multiple Choice

External users of financial information:

• A) Are those individuals involved in managing and operating the company.
• B) Include internal auditors and consultants.
• C) Are not directly involved in operating the company.
• D) Make strategic decisions for a company.
• E) Make operating decisions for a company.

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Definitions:

Spending Variance

is the difference between the budgeted amount of expenses and the actual amount spent.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for better performance evaluation.

Indirect Materials

Materials used in the production process but not directly traceable to a finished product, such as lubricants for machinery.

Spending Variance

The difference between the budgeted or planned amount of expense and the actual amount spent.