Which statement about employees is true?

• A. External Users
• B. They are internal users who are interested in the company's future
• C. They determine the company's financial history
• D. They are not concerned with financial information

Answer: (B)

Understanding who uses accounting information helps explain this. Employees are internal users because they belong to the organization and rely on financial data to make decisions related to the company’s operations and planning. They care about the company’s future since that affects job security, compensation, and long-term benefits. So describing employees as internal users who are interested in the company’s future accurately captures their role.

External users are those outside the organization, such as investors or lenders, not employees. The financial history is built from past transactions recorded in the books, not determined by employees. And employees do have an interest in financial information because it helps them assess the company’s stability and prospects.