ExpertEasy2 marksMultiple Choice
The Context and Purpose of Financial ReportingStakeholdersContext and purpose of financial reporting
ACCA · Question 33 · The Context and Purpose of Financial Reporting
Section A
Different stakeholders have different information needs from a company's financial statements.
Which stakeholder group is primarily interested in information about the company's ability to pay interest and repay principal on time?
Section A
Different stakeholders have different information needs from a company's financial statements.
Which stakeholder group is primarily interested in information about the company's ability to pay interest and repay principal on time?
Answer options:
A.
Equity investors
B.
Lenders
C.
Employees
D.
Suppliers
How to approach this question
Match the specific financial need (interest and principal repayment) to the stakeholder who provides debt finance.
Full Answer
B.Lenders✓ Correct
Lenders, such as banks and bondholders, provide debt finance. Their primary concern is the company's solvency and liquidity to ensure that interest payments and principal repayments are made on schedule.
Common mistakes
Selecting suppliers, who are interested in short-term payment ability but not interest/principal.
Practice the full ACCA FA — Financial Accounting Practice Exam 5
65 questions · hints · full answers · grading
More questions from this exam
Q01Section A
Quantum Innovations, a rapidly growing tech startup, is preparing its first set of for...EasyQ02Section A
MetroWater, a public utility company, is finalizing its annual report. The chief accou...MediumQ03Section A
GlobalHealth NGO receives a restricted cash grant of $50,000 specifically designated f...MediumQ04Section A
CircuitWorks manufactures specialized electronic components. At year-end, they have 1,...MediumQ05Section A
CodeCrafters Ltd is developing a new proprietary software platform. During the year, t...Easy