Question

A_______ would most likely use an entity's financial report to determine whether or not the business entity is eligible for a loan.

• A. Creditor
• B. Emplyoee
• C. Mangement
• D. None of the Above

Answer 1

Answer: (A)

Creditor

There are two types of creditors.

Short term creditors are those who are providing goods or services on credit by analyzing the short-term financial position of the company.

Long term creditors are basically lenders who are providing loans to the business for long term purposes. These creditors uses the financial statements and reports to determine the financial worth and see the repayment capabilities of the firm before lending any amount.