A supplier, when considering offering credit to a new customer, is most interested in the customer’s:compliance with accounting standards.taxable income.annual dividends.ability to pay off debts as they fall due.
Question
A supplier, when considering offering credit to a new customer, is most interested in the customer’s:compliance with accounting standards.taxable income.annual dividends.ability to pay off debts as they fall due.
Solution
The supplier, when considering offering credit to a new customer, is most interested in the customer’s: "ability to pay off debts as they fall due."
Here's why:
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"Compliance with accounting standards." - While this is important for transparency and reliability of financial information, it does not directly indicate the customer's ability to pay off debts.
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"Taxable income." - This might give some indication of the customer's financial status, but it does not directly show the customer's liquidity or ability to pay off debts as they fall due.
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"Annual dividends." - This is relevant to shareholders of the customer's company, but it does not directly indicate the customer's ability to pay off debts.
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"Ability to pay off debts as they fall due." - This is correct. The supplier would be most interested in the customer's liquidity and ability to pay off debts as they fall due, as this directly impacts the customer's ability to pay for the goods or services on credit.
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