Tiny Timber Tree Farms applied to United Bank for a business loan. Which financial statements would the loan officer of the bank be most likely to request?
A) journals, ledgers, and trial balances
B) the prospectus, statement of retained earnings, and total liability statement
C) total debits and total credits
D) balance sheets, income statements, and cash flow statements

Question

Quizplus · Accepted Answer

The loan officer of the bank would most likely request the balance sheets, income statements, and cash flow statements. These financial statements provide a comprehensive overview of the company's financial health, including its assets, liabilities, revenues, expenses, and cash flow. Journals, ledgers, and trial balances provide more detailed information about individual transactions and accounts but do not provide a big-picture view of the company's financial standing. The prospectus, statement of retained earnings, and total liability statement may also be useful, but they are not as commonly requested as the three financial statements mentioned above. Total debits and total credits do not provide useful information for evaluating a company's financial health.

Tiny Timber Tree Farms Applied to United Bank for a Business