Which of the following is the external user of financial statements?
Correct answer: A. Creditor of the business
- A. Creditor of the business
- B. CEO of the business
- C. Manager of the business
- D. Controller of the business
Explanation
A creditor is external to the business and uses financial statements to assess repayment ability and credit risk. Managers, the CEO and the controller are internal users because they work within the organization.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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