Scenario - The Williams Company
Based in South Dakota, USA, the Williams Company has been in operation since 1967. It has five branches located in China, Europe, South America, Mexico, and Canada. Its exquisite product line of fine custom-made jewelry is highly desired throughout the world. This company has maintained a very healthy balance sheet.
The Williams Company is known within the industry for integrity and fair business practices. This company maintains an accounting system that is open for any stakeholder to view. It prides itself on being honest and trustworthy. The company feels it is this honesty in business practice that has led it to be a billion dollar organization.
-If the company's stakeholders requested to be shown a financial statement that would identify the Williams Company's assets, liabilities, and equity for a given period of time, which one of the following statements would they most likely be requesting?

Question

Quizplus · Accepted Answer

The stakeholders would most likely be requesting a balance sheet because it identifies the company's assets, liabilities, and equity at a specific point in time. The income statement shows a company's revenues and expenses over a period of time, the cash flow statement shows how cash is being used by a company over a period of time, and the retained earnings statement shows changes in a company's retained earnings over a period of time. The trial balance sheet is not a standard financial statement, but rather a tool used by accountants to ensure that debits and credits in the accounting system are balanced.

Scenario - the Williams Company