Investors and creditors are interested in the probability that their original investment or loan will eventually be returned,and that they will receive a reasonable return while their funds are invested or borrowed.These expectations are collectively referred to as:
A)Expected profitability.
B)The objectives of financial reporting.
C)Cash flow prospects.
D)Financial position.

Question

Quizplus · Accepted Answer

The expectations of investors and creditors are primarily focused on the cash flow prospects of their investment or loan. They want to ensure that their funds will eventually be returned with a reasonable return during the investment or borrowing period. This is because cash flow is the most important determinant of the entity's ability to meet its financial obligations. Therefore, the correct answer is option C - cash flow prospects. Options A, B, and D are not a complete reflection of the expectations of investors and creditors.

Investors and Creditors Are Interested in the Probability That Their