Credit risk is an issue for financial instruments and must be disclosed because:
A)the company may default on its loan
B)the company may not perform their obligations
C)the company may not have enough cash flow to pay suppliers
D)the other parties to financial instruments may not perform their obligations

Question

Quizplus · Accepted Answer

Credit risk refers to the risk that the other parties involved in financial instruments may not fulfill their obligations, which is why it must be disclosed.

Credit Risk Is an Issue for Financial Instruments and Must