What is the major purpose of the statement of net position from a financial analysis perspective?
A)to describe the major sources of revenue and types of expense
B)to show the inflows and outflows of cash during the reporting period
C)to show whether the entity was efficient and effective in delivering services
D)to provides information about the entity's liquidity and financial flexibility

Question

Quizplus · Accepted Answer

The major purpose of the statement of net position is to provide information about the entity's liquidity and financial flexibility. This includes information about assets, liabilities, and net position, which can help a financial analyst determine the entity's ability to meet its financial obligations and its overall financial health. Choices A, B, and C may be important considerations in financial analysis, but they are not the primary purpose of the statement of net position.

What Is the Major Purpose of the Statement of Net