Multiple Choice
Which of the following is NOT a type of accounting commonly used in business?
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1. Introduction to Accounting
Types of Accounting
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Which term refers to the group of people who may be affected by a company's actions?
A
Stakeholders
B
Auditors
C
Creditors
D
Shareholders
Verified step by step guidance1
Understand the term 'stakeholders' in Financial Accounting. Stakeholders refer to individuals or groups who are impacted by a company's actions, decisions, or performance. This includes employees, customers, suppliers, investors, and the community.
Differentiate between the options provided: Auditors are external professionals who review financial statements for accuracy and compliance. Creditors are entities or individuals to whom the company owes money. Shareholders are owners of the company who hold shares in its equity.
Recognize that stakeholders encompass a broader group than just shareholders, auditors, or creditors. Stakeholders include anyone with an interest in or who is affected by the company's operations.
Analyze the context of the question. Since the term refers to a group affected by the company's actions, stakeholders is the most inclusive and appropriate term.
Conclude that the correct term is 'stakeholders,' as it aligns with the definition and scope of the question.
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