O Level Accounting (7707)•7707/12/O/N/24

Explanation
Assets as Loan Security
Steps:
- Identify non-current assets as long-term items like property or equipment used as collateral.
- Recognize that security refers to backing for loans, where lenders assess asset value to minimize risk.
- Evaluate stakeholders: lenders need this info to approve credit, while others focus on operations or regulations.
- Match to options: only the bank manager directly uses asset values for lending decisions.
Why A is correct:
- Bank managers evaluate non-current assets as collateral under lending principles to secure loans against default risk.
Why the others are wrong:
- B: Credit customers seek payment assurance via liquidity; trade unions focus on wages and conditions, not loan security.
- C: Employees prioritize job stability and benefits, ignoring asset collateral values.
- D: Government departments assess taxes or compliance, not assets as loan security.
Final answer: A
Topic: Interested parties
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