Accounting information is used by investors and creditors of a company to predict
- potential merger candidates for the company
- appropriate remunerations for the company’s staff
-
future cash flows of the company
- future tax payments of the company
The correct answer is: C
Explanation
The average lender or investor does not have ongoing inside access to the day-to-day operations of a company. Instead, it relies on financial accounting to provide accurate and readily comparable information. Financial accounting allows outside actors to observe the profitability and value of a business.
Creditors are interested in accounting information, because it enables them to determine the credit worthiness of the business.