Multiple Choice
Which type of accounting activities are essential for business operations but do not provide a competitive advantage?
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1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
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Which of the following is NOT an external user of accounting information?
A
Management
B
Investors
C
Government agencies
D
Creditors
Verified step by step guidance1
Understand the concept of external users of accounting information: External users are individuals or entities outside the organization who rely on financial statements to make decisions. Examples include investors, creditors, and government agencies.
Recognize the role of management: Management is part of the internal structure of the organization and uses accounting information for operational and strategic decision-making. They are considered internal users, not external users.
Compare the options provided: Investors, government agencies, and creditors are external users because they are outside the organization and use accounting information for purposes such as investment decisions, regulatory compliance, and lending decisions.
Identify the option that does not fit the definition of external users: Since management is part of the internal structure, they are not external users of accounting information.
Conclude that the correct answer is 'Management,' as it is the only option that represents an internal user rather than an external user.
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