Question

Which of the following is INCORRECT in explaining the users of accounting information :

a. accounts payable need accounting information to evaluate the business ability to pay debts on time
b. investors use the accounting information for planning, controlling and organising the business
c. government needs accounting statements and reports for tax purposes
d. employees are interested to know the business progress to ensure steady employment and career enhancement ​

Answer 1

b. investors use the accounting information for planning, controlling and organizing the business

Step-by-step explanation:

Investors are individuals or firms that commit their money to a business as capital with profits expectations. Investors are usually not part of business management. Their main contribution is the money they provide to finance the business operations. Investors, therefore, do not manage, plan, control, or organize the business.

Investors are also users of accounting information. They are classified as external users. To investors, accounting information communicates how the management is using their funds and the expected business performance in terms of profitability and growth.