Nappanee Inc.has a provision in its loan from the local bank that it must maintain a current ratio above 1.75.Which of the following would be one of their objectives of financial reporting?

Question

Quizplus · Accepted Answer

The provision in the loan from the local bank that Nappanee Inc. must maintain a current ratio above 1.75 is a contractual obligation, thus one of the objectives of financial reporting would be to monitor contract compliance.