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ACCA Applied Knowledge · Business and Technology · Financial information provided by business

Nadia is considering buying shares in Orion Co. She wants to judge whether the directors have used the company's resources properly over the last year. Which role of financial information is she mainly relying on?

Nadia is relying on accountability, also called stewardship. Financial statements show how the directors have managed and used the resources entrusted to them, which lets shareholders and investors judge their performance. Product costing and cash planning are internal management purposes.

  1. AAccountability (stewardship)Correct
  2. BCosting of individual products
  3. CShort-term cash planning

Explanation

Judging how directors have looked after and used owners' resources is stewardship or accountability. Product costing and cash planning are internal management uses.

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