An entity where it is reasonable to expect the existence of users who depend on general-purpose financial reports for information to enable them to make and evaluate economic decisions is known as a :
A) public entity.
B) company.
C) financial entity.
D) reporting entity.

Question

Quizplus · Accepted Answer

A reporting entity is an entity that generates financial reports which are used by external users to make informed decisions about the entity. Therefore, it is the best choice among the options provided. A public entity refers to a government or governmental agency, a company is too broad and can encompass entities that do not generate financial reports, and financial entity is not a commonly used term in accounting.

An Entity Where It Is Reasonable to Expect the Existence