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Multiple Choice Questions

1. What level of management do departmental heads, branch managers, and junior executives belong to?

a. Top level manager
b. Middle level manager
c. Low level manager
d. CEO of a company

True or False

2. Write TRUE if a statement is true, and write FALSE if it is not. Write your answers in your notebook.

1. Investors and creditors of business firms are groups who need accounting information.
2. Management of a business enterprise is the major external user of information.
3. Internal users need accounting data to communicate financial information.
4. Internal users of financial statements include owners, managers, and employees.
5. Internal users use accounting information for decision purposes.

Identification

3. The following are users of financial statements. Identify if the users mentioned below are external or internal. Write your answers in your notebook.



Answer :

GinnyAnswer

Final answer:

Middle-level managers handle day-to-day operations, internal users utilize accounting information for decisions, shareholders are external users of financial statements.


Explanation:

Middle-level managers include departmental heads, branch managers, and junior executives in an organization. They are responsible for implementing the decisions made by top-level management and overseeing the day-to-day operations of their departments.

Internal users such as owners, managers, and employees utilize accounting information for decision-making purposes within a company. This information helps them assess the financial performance of the organization and make informed choices.

Shareholders are considered external users of financial statements. They are individuals who own shares in a company and are not directly involved in the day-to-day operations of the business but have a vested interest in its financial health.


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