When Nathaniel Products applied for a loan to expand its sailboat business, the bank requested several financial reports so that it could assess the company's ability to repay the loan. Which category of accounting would be responsible for the preparation of these financial reports?
A) managerial accounting
B) financial accounting
C) forensic accounting
D) cost accounting

Question

Quizplus · Accepted Answer

Financial accounting is responsible for the preparation and reporting of financial statements such as balance sheets and income statements, which are used by external parties such as banks to evaluate a company's financial performance and make lending decisions. Managerial accounting is used for internal purposes, such as budgeting and decision-making, while forensic accounting involves investigating financial crimes. Cost accounting involves the analysis of the costs of producing goods or services.

When Nathaniel Products Applied for a Loan to Expand Its