Which of the following questions CANNOT be answered from a balance sheet?
A) What has caused the changes in cash held during the period?
B) Is the company soundly financed?
C) Can the company pay its bills on time?
D) Should a dividend be declared?

Question

Quizplus · Accepted Answer

The balance sheet provides information on the company's assets, liabilities, and equity at a specific point in time. It does not provide information on the reasons for changes in cash during the period. This information can be found in the cash flow statement. The other questions can be answered from the balance sheet. B) The balance sheet provides information on the company's equity and debt levels, which can be used to assess whether the company is soundly financed. C) The balance sheet provides information on the company's current and long-term liabilities, which can be used to assess its ability to pay its bills on time. D) The balance sheet provides information on the company's retained earnings, which can be used to assess whether a dividend should be declared.

Which of the Following Questions CANNOT Be Answered from a Balance