Which of the Following External Users Would Require Financial Statement

question 8

Multiple Choice

Which of the following external users would require financial statement information,specifically information concerning ability to meet financial obligations?

• A) Governmental units
• B) Lenders
• C) Vendors
• D) Employees
• E) Customers

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Definitions:

Double-Entry Accounting

A system of bookkeeping where every entry to an account requires a corresponding and opposite entry to a different account.

Debits

Accounting entries that represent an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Credits

Recognition or acknowledgment for something received or accomplished, often used in finance to denote money received or a decrease in liabilities.

Liabilities

Liabilities are financial obligations or debts that a company owes to others, which need to be settled over time through the transfer of economic benefits including money, goods, or services.