Which of the following statements is CORRECT?
A)The four most important financial statements provided in the annual report are the balance sheet, income statement, cash budget, and the statement of stockholders' equity.
B)The balance sheet gives us a picture of the firm's financial position at a point in time.
C)The income statement gives us a picture of the firm's financial position at a point in time.
D)The statement of cash flows tells us how much cash the firm must pay out in interest during the year.
E)The statement of cash needs tells us how much cash the firm will require during some future period, generally a month or a year.

Question

Quizplus · Accepted Answer

The balance sheet provides a snapshot of the firm's financial position at a specific point in time, while the income statement shows the firm's financial performance over a period of time. The cash budget is not a financial statement, and the statement of stockholders' equity shows changes in the owners' equity in the company over time. The statement of cash flows provides information on the firm's cash inflows and outflows during a period, but it does not tell us specifically how much the firm must pay out in interest. The statement of cash needs is not a financial statement, but rather a forecast of the firm's future cash requirements.

Which of the Following Statements Is CORRECT