Which Group of Users Is Most Likely to Require Accounting

question 37

Multiple Choice

Which group of users is most likely to require accounting information to assess the ability of a business to pay interest and repay a loan?

• A)Employees
• B)Customers
• C)Creditors
• D)Taxation department

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Definitions:

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Planned Expenditures

Forecasted spending for specific purposes within a certain time frame, often categorized into operating or capital expenditures.

Cash Surpluses

Occurs when a company has more cash inflow than outflow, leading to excess liquidity.

Liquidity

The simplicity of turning an asset into cash without impacting its market value.