A bank requesting accounting information is looking for:
A) the amount of tax that should be paid.
B) cash flows from dividends paid.
C) the ability of the entity to repay a loan.
D) environmental aspects of the business.

Question

Quizplus · Accepted Answer

When a bank requests accounting information, its main concern is to assess the financial health of the entity and their ability to repay a loan. The accounting information can help the bank determine the creditworthiness of the entity and evaluate the risks associated with lending money to them. The amount of tax that should be paid and the cash flows from dividends paid may be relevant in certain contexts, but they are not the primary focus of the bank's request. Environmental aspects of the business are generally not a concern for banks seeking accounting information.

A Bank Requesting Accounting Information Is Looking For