Accounting information serves a contracting function when it is used by:
A)creditors to manage financial agreements.
B)government officials to regulate the business and its financial records.
C)analysts to assess business risks.
D)investors to vote on company policies.

Question

Quizplus · Accepted Answer

Accounting information is critical for creditors to evaluate financial agreements they have with a company, such as loans or credit lines. They use this information to assess the risk and ensure that the company is financially sound enough to repay any borrowed funds.

Accounting Information Serves a Contracting Function When It Is Used