Rita and Jose Hernandez want to assess their financial progress over the next few years.They have decided to take a reading of their status every New Year's Day.Which financial statement would they prepare each year?
A)Will
B)Cash-flow statement
C)Balance sheet
D)Federal income tax return

Question

Quizplus · Accepted Answer

The balance sheet provides an overview of a person's assets, liabilities, and net worth at a specific point in time. This is the best financial statement for Rita and Jose Hernandez to assess their financial progress each New Year's Day because it shows their overall financial position and any changes that may have occurred since the previous year. The other options listed are not appropriate for this purpose. A will is a legal document that outlines how someone's assets will be distributed after their death. A cash-flow statement shows income and expenses over a period of time and is not as useful for assessing overall financial progress. A federal income tax return is a document used to report income and taxes paid to the government and does not provide an overview of overall financial status.

Rita and Jose Hernandez Want to Assess Their Financial Progress