Accounting Multiple Choice Question – 6 January 2025

Alex is a financial accountant working for Lucy plc.

In conversation with his colleague Ted, Alex has made the following points below concerning financial statements.

Which of Alex’s points is true?

Select ONE answer:

1. Financial statements are used mainly by management
2. Financial statements are used by parties internal to the business only
3. Financial statements are used only by investors
4. Financial statements are used by investors, payables (creditors) 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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > General purpose financial statements are used by investors, payables (creditors) and management.

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