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Paper 1 · November 2020 · users of accounting information

Which group studies the published accounts of a business enterprise mainly to judge whether it can repay money it has been lent?

Athe trade union representing staff
Bthe local community
Cbanks and other lenders
Dthe firm's advertising agency

Explanation

A lender reads the accounts for the security of its loan, looking at profit, gearing and cash flow to see whether interest and capital can be paid. A trade union reads the same accounts for job security and wage bargaining, which is a different question of a different figure.

Derived from ZIMSEC Business Enterprise Skills Paper 1, Nov 2020, Q1

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