Day: January 3, 2025

In relation to users of financial information, which of the following statements is true?

Select ONE answer:

1. External users evaluate the performance of a company’s management using management accounting
2. Financial reporting provides information to managers and people outside the company, such as investors
3. Management accounting provides information to managers and people outside the company, such as investors
4. Financial reporting generates confidential information for internal decision makers such as executives and management

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > External users do not have access to management accounting information (1) and (3). Financial reporting does provide information to both managers and people outside the company, such as investors (2) but it is not confidential (4).
3. Not correct
4. Not correct

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