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Question
Short Answer Question
State the importance of financial statement to creditors.
Solution
Creditors are those individuals and organisations to whom a business owes money on account of credit purchases of goods and services. Hence, the creditors require information about the credit worthiness and liquidity position of the business.
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RELATED QUESTIONS
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State the importance of financial statements to investors.
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Explain in detail about the significance of the financial statements
Under which line item of the financial statements following items will be shown:
(i) Sales;
(ii) Loss on Sale of Vehicle;
(iii) Debentures;
(iv) Unamortised Loss on Issue of Debentures (to be written off within 12 months of the date of Balance Sheet);
(v) Encashable Leave Payable at the Time of Retirement;
(vi) Tax Reserve;
(vii) Carriage on Purchases of Stock-in-Trade; and
(viii) Telephone and Internet Expenses?
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