Skip to content

CS Executive · Corporate Accounting and Financial Management · Introduction to Accounting

Which of the following is an external user of accounting information whose interest is mainly in the company's ability to repay interest and principal on time?

A lender such as a bank is the external user concerned with whether the company can pay interest and repay principal on time. It therefore studies liquidity and solvency, whereas the production manager, internal auditor and managing director are internal users using data for management and control.

  1. ALender such as a bankCorrect
  2. BProduction manager of the company
  3. CCompany's internal audit head
  4. DManaging director

Explanation

Lenders are external users who assess liquidity and solvency to judge whether interest and principal will be repaid. The production manager, internal audit head and managing director are internal users who use information for management decisions and control.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Accounting shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to AccountingFree diagnostic mock

More Introduction to Accounting questions