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Creditors use accounting information for the purpose of ____

Creditors use accounting information for the purpose of ____
Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE
  • A Planning sales to a company
  • B Controlling a company's affairs
  • C Investing in a company
  • D Assessing a company's liquidity.
Correct Answer: Option D
Explanation:
Creditors (such as suppliers or lenders) are primarily interested in a company’s liquidity - its ability to meet short-term obligations and repay debts.

They use accounting information to evaluate whether the company can pay its bills on time.

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