An entity in respect of which it is reasonable to expect the existence of users dependent on general purpose financial reports for information which will be useful to them for making and evaluating decisions about the allocation of scarce resources is known as a:
A)reporting entity
B)non- reporting entity
C)disclosing entity
D)none of the above

Question

Quizplus · Accepted Answer

A reporting entity is an organization or group for which financial reports are prepared and made available to users for decision-making purposes. This entity is expected to have users who rely on general-purpose financial reports to make informed decisions about the allocation of scarce resources. A non-reporting entity is not required to prepare and present financial reports, while a disclosing entity is a reporting entity that is required by law or regulations to disclose certain information.

An Entity in Respect of Which It Is Reasonable to Expect