Maria owns a retail business in Buenos Aires. She wants to know if her business can pay its debts when they fall due. Which user of accounting information has this concern?

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Question

Maria owns a retail business in Buenos Aires. She wants to know if her business can pay its debts when they fall due. Which user of accounting information has this concern?

Accepted Answer

The owner assessing liquidity — Award 1 mark for identifying that the owner uses accounting information to assess liquidity (ability to pay debts). A is incorrect — employees are concerned with profitability for job security, not liquidity assessment. C is incorrect — customers use non-accounting information for quality. D is incorrect — competitors are not legitimate users of internal accounting information.

Answer

Customers checking product quality

Answer

The owner assessing liquidity

Answer

Employees wanting to know about job security

Answer

Competitors analysing market share

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