Question

Which of the following can you NOT learn from the balance sheet? How a business is...

  1. Which of the following can you NOT learn from the balance sheet?

    1. How a business is being financed

    2. How much a business spends on cost of goods sold

    3. How much a business might be worth

    4. Whether the business is likely to meet their current payment obligations

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Homework Answers

Answer #1

Option A is correct


i.e How a business is being financed

Because

For a given date, the Balance sheet shows the following for the company:

Firstly, total Assets. Items of value the firm owns or controls, which it uses to earn revenues.
Secondly, total Liabilities. What the firm owes.
Thirdly, total Owners Equities. What the firm owns outright.
More accurately, the Balance sheet shows end-of-period balances in the firm's Assets, Liabilities, and Owners Equity accounts. However, its name includes "Balance" for another reason.

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