Tag: Topic 17

Which three of the following users of financial statements are likely to be interested in the financial statements of a very small private limited company?

1. UK stock market analysts
2. The company’s employees
3. The company’s bank
4. Very large Institutional shareholders
5. The company’s suppliers

Select ONE answer:

1. 2, 3 and 5
2. 1, 3 and 5
3. 2, 3 and 4
4. 3, 4 and 5

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – The company’s employees would be interested in the financial statements of the company as they want to know whether or not they would have a job in the future. The company’s bank may be interested in the financial statements as the company being a very small company, would need to take out loans from the bank. The bank wants to access the ability of the company to repay the loan. The company’s suppliers, similar to it’s employees, will want to know if they will be able to continue selling their products to the company in the future thereby building a good relationship with the company. UK stock market analysts may only be interested in public limited companies as it provides information about investment to aid investors into deciding which companies to invest in.
2. Not correct
3. Not correct
4. Not correct

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