Multiple Choice
Which of the following situations best represents a unilateral contract?
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1. Introduction to Accounting
Types of Accounting
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Which of the following types of accounting is primarily concerned with providing information to external users such as investors, creditors, and regulators?
A
Managerial Accounting
B
Tax Accounting
C
Financial Accounting
D
Cost Accounting
Verified step by step guidance1
Understand the purpose of each type of accounting mentioned in the problem: Managerial Accounting focuses on internal decision-making, Tax Accounting deals with compliance and tax-related matters, Cost Accounting analyzes costs for internal efficiency, and Financial Accounting provides information to external users.
Identify the key phrase in the question: 'providing information to external users such as investors, creditors, and regulators.' This is the primary focus of Financial Accounting.
Recall that Financial Accounting involves preparing financial statements (e.g., income statement, balance sheet, cash flow statement) that are shared with external stakeholders to assess the financial health of an organization.
Eliminate the other options based on their primary focus: Managerial Accounting is for internal users, Tax Accounting is for tax compliance, and Cost Accounting is for cost management within the organization.
Conclude that the correct answer is Financial Accounting, as it aligns with the requirement of providing information to external users.
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