You are deciding whether you should invest in a 5 year old technology company. A

Question

You are deciding whether you should invest in a 5 year old technology company. An investment analyst is giving you advice, but you'd like to explore the company's finances on your own, so that you have first-hand knowledge of their financial position. Which statement below best describes the information you will find on the Balance Sheet? O A. The Balance Sheet provides a snapshot at a moment in time of the past .investing and financing activities of a company. The Balance Sheet is the company's financial statement that shows Total Assets Total Liabilities plus Total Owner's Equity O B. The Balance Sheet shows a company's revenues, expenses, gains and losses for a period of time ending with the net income for that period. The Balance Sheet reflects the flow of resources that result from a company's operations O C. The Balance Sheet shows why a company's cash position changed during a given period of time. It shows which of the company's activities (Investing, Operations, and/or Financing) generated cash and whiclh activities used cash. O D. The Balance Sheet shows what the company's taxable income is in a particular year Choose the correct option

Explanation / Answer

Option A is correct. Balance sheet is a snapshot at a time which shows all the company's assets, liabilities and stockholders equity and it satiesfies the equation assets = liabilities+ stockholders equity.

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