Question

1. Bankers tend to prefer companies to practice rather conservative accounting with regard to assets and liabilities because ______.

a. they are more interested in profitability than solvency

b. they are more interested in net income than liquidity

c. they are more interested in solvency and liquidity than profitability

d. they are usually the main borrowers of companies

2. "Some studies have found that accountants' financial reporting decisions are ______ between countries because of ______ in the cultural values of the accountants applying the rules."

a. similar; differences

b. different; similarities

c. similar; similarities

d. different; differences

Answer 1

Ans 1 C

They are more interested in solvency and liquidity than profitability.

Reason:-

Profitability is temporary. Sometimes it can go up and sometimes it can go down. However, in case organization is not able to repay debts then banks can sell the assets to get the debts.

Ans 2 D

Different; differences

Reason:-

Cultures dominate the financial reporting needs. Since each country has its own culture, hence they have different financial reporting methods.

Please hit like. In case of doubt, please comment