What is the most common use that the federal government makes of a fir

QUESTION

What is the most common use that the federal government makes of a firm’s accounting information?

A) to evaluate the company’s financial health and credit rating
B) to see whether the firm is profitable
C) to ensure that appropriate tax revenues are collected
D) to plan and guide the firm
E) to monitor how well the firm is doing

ANSWER

Answer: C
Explanation: C) As outside users of accounting information, government agencies use it to ensure that appropriate tax revenues are collected as well as to assess compliance with securities regulations.