Financial Accounting, 8th Edition
Financial Accounting, 8th Edition
8th Edition
ISBN: 9780078025556
Author: Robert Libby, Patricia Libby, Daniel Short
Publisher: McGraw-Hill Education
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Chapter 13, Problem 1Q
To determine

State the primary items on financial statements that are usually concerned by the creditors.

Expert Solution & Answer
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Explanation of Solution

Financial statements:

Financial statements refer to those statements, which are prepared by the Company according to particular formats in accounting to show its financial information on a particular date.

Financial statements include the following statements:

  • Cash flow statement
  • Income statement
  • Balance sheet
  • Statement of Owner's Equity

The primary items on the financial statements that are usually concerned by the creditors are as follows:

  • In the balance sheet, creditors are concerned about the assets and debts of the company.
  • In the income statement, creditors are concern about the profitability of the business.
  • In the cash flow statement, creditors are concern about the cash generated by the company from the operations.

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