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Question
Identify the external user of financial information or financial statements.
Identify the external user of financial information or financial statements.
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Solution
The correct option is D Investors of the business
Financial accounting information is used for decision making by external users. External users, are not involved in the operations of the company but hold some financial interest. External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.
Financial accounting information is used for decision making by external users. External users, are not involved in the operations of the company but hold some financial interest. External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.
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