Question

Rita and Jose Hernandez want to assess their financial progress over the next few years. They have decided to take a reading of their status every New Year's Day. Which financial statement would they prepare each year?A. WillB. Cash-flow statementC. Balance sheetD. Federal income tax return

Answer 1

Answer:

C. Balance sheet

Explanation:

If Rita and Jose want to assess their progress overtime and they want to read their status each year so, should prepare balance sheet for each year because balance sheet represent the organization's financial position. It tells us that what an organization had over the past years of business. All the income and losses of each year is accumulated in the balance sheet to show the net position at a point of time. Cash flow and federal income tax return are prepared to show the data specific period only.

Answer 2

Answer:

The correct answer is letter "C": Balance sheet.

Explanation:

For companies, the Balance Sheet is a statement of their net worth broken down into three sections: assets, liabilities, and equity. Assets are equal to liabilities plus equity. A balance sheet shows how much a company has, owes and invests in.

For individuals, a balance sheet will help them determine what their properties and debts are. The result, just like for companies, represents their net worth. Thus, Rita and Jose should make a balance sheet on their current belongings a liabilities to find out the differences of that report with others they can make inf the upcoming years.