Brantford Business Ltd.(BBL) has a loan outstanding from a Canadian bank.It uses the loan to finance its working capital.The bank has asked for BBL to provide it with monthly listings of their accounts receivables and inventory items.The requested listing is an example of:
A)a special purpose report.
B)a general purpose report.
C)a balance sheet report.
D)a cash flow report.

Question

Quizplus · Accepted Answer

The requested listing is specific to BBL's accounts receivables and inventory items, which makes it a special purpose report. This report is meant to provide the bank with updates on BBL's working capital, which is the purpose of the loan. It is not a general purpose report because it is not meant for general use or to provide an overall view of BBL's financial situation. It is also not a balance sheet or cash flow report because it only includes specific items, not all of BBL's assets and liabilities or cash inflows and outflows.