Financial statements provide vital information,to managers,regarding an organization's current _______ position.
A) liquidity and solvency
B) assets and affluence
C) liquidity and wealth
D) assets and solvency
E) cash flow and solvency

Question

Quizplus · Accepted Answer

Financial statements provide information on an organization's liquidity (ability to meet short-term obligations) and solvency (ability to meet long-term obligations), including its assets, liabilities, and equity. This information is crucial for managers to make informed decisions about the organization's financial health and sustainability. Option B is not the best choice because "affluence" is not typically used in financial reporting or analysis. Option C is incorrect because "wealth" is a broader term than liquidity and solvency. Option D is incorrect because it only includes assets and solvency, omitting information on liabilities and equity. Option E is incorrect because it only includes cash flow and solvency, omitting information on assets and liabilities.

Financial Statements Provide Vital Information,to Managers,regarding an Organization's Current _______