Ricardo is a loan officer for a bank and is reviewing the financial statements of a prospective borrower. As a user of accounting information, Ricardo is most interested in using this information ______.
A) to evaluate credit risk
B) to make an investment decision
C) in contract negotiations
D) to plan and control

Question

Quizplus · Accepted Answer

As a loan officer, Ricardo's primary concern is assessing the creditworthiness of the prospective borrower. Therefore, he would be most interested in using financial statements to evaluate credit risk, including the borrower's ability to repay the loan on time and in full. Options B, C, and D may be important for other users of accounting information, such as investors, lawyers, or managers, but they would not be the primary focus of a loan officer.

Ricardo Is a Loan Officer for a Bank and Is