Long-Term Creditors Are Usually Most Interested in Evaluating

question 81

Multiple Choice

Long-term creditors are usually most interested in evaluating:

• A)Liquidity.
• B)Managerial effectiveness.
• C)Solvency.
• D)Profitability.

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Definitions:

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors from fraudulent financial reporting by corporations.

Financial Statement Fraud

Deliberate manipulation of a company's financial records to present a false picture of its financial condition.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Sole Proprietorships

A business structure where a single individual owns and operates the business, taking on the responsibilities and benefits of the business.