Which of the following is not an external use of accounting information?
A) The Internal Revenue Service reviews the taxpaying company's annual return.
B) As part of a company's annual employee evaluation process, the human resources manager reviews payroll information to determine each employee's raise for the upcoming year and annual bonus.
C) A loan officer uses a customer's recent financial statements to determine whether to approve that customer's loan application.
D) A potential investor reviews an organization's most recent annual report to determine whether to invest in that company.
E) A supplier reviews a new customer's credit application to determine whether that customer is credit-worthy.

Question

Quizplus · Accepted Answer

B is the correct choice because it describes an internal use of accounting information, specifically within the human resources function for employee evaluations, raises, and bonuses. All other options describe scenarios where external parties use the company's financial information.

Which of the Following Is Not an External Use of Accounting