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WAEC Financial Accounting 2017 Question 1

Question 1

Introduction to Accounting

Customers use the financial statement of a company to

  1. A.assess the financial position of the business.
  2. B.regulate their activities.
  3. C.ascertain the taxable profit of the business.
  4. D.be sure of the extent of job security.
Show the answer and explanation

Answer: A (assess the financial position of the business.)

Explanation

Customers check the financial position to be sure the supplier will stay in business and keep supplying them.