Which financial statement would indicate whether the company relies more on debt or on shareholders' equity to finance its assets?
A)Statement of cash flows
B)Statement of changes in equity
C)Statement of income
D)Statement of financial position

Question

Quizplus · Accepted Answer

The Statement of Financial Position, also known as the Balance Sheet, shows a company's assets, liabilities, and shareholders' equity at a specific point in time. By comparing the liabilities (debt) to the shareholders' equity, one can determine whether the company relies more on debt or equity financing.

Which Financial Statement Would Indicate Whether the Company Relies More