22. 22. Which of the following statements is most correct? A. Shareholders deman

Question

22.

22. Which of the following statements is most correct? A. Shareholders demand financial information primarily to assess profitability and risk whereas bankers demand information primarily to assess cash flows to repay loan interest and principal B. Under accrual accounting principles, the cost of inventory should be reported as an expense in the income statement when it is sold, regardless of when it was purchased C. Publicly traded companies must provide to the Securities Exchange Commission annual audited financial statements (10K reports) and quarterly audited financial statements (10Q reports) it must also report $175.3 million in cash. an income statement, statement of stockholders' equity, and statement of cash D. If a company reports retained earnings of $175.3 million on its balance sheet, E. A balance sheet shows a company's position over a period of time, whereas flows show its position at a point in time.

Explanation / Answer

22.) A , Both bankers and shareholders are interested in company's financial information ,but with different point of views. Shareholders perception to demand financial information for about company's profitability and its return for per share whereas for Banker's perception ,it is only for solvency check (whether company will be able to payoff loan along with interest or not) of company and their creditworthiness.

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