When Looking to the Statement of Financial Position for an Assessment

question 11

Multiple Choice

When looking to the statement of financial position for an assessment of earnings quality, stakeholders should pay particular attention to

• A)a proportionately high cash balance, as this signifies high-quality earnings.
• B)how the company is financed and what the revenue-generating assets are.
• C)a proportionately low liability balance, as this signifies high-quality earnings.
• D)silly question.The statement of financial position is not a reflection of earnings quality.

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Definitions:

Total Amount Financed

In a loan, the total sum of money provided, including the principal and any additional fees or charges by the lender.

Payments Due Dates

Specific dates by which payments for utilities, loans, credit cards, and other financial obligations are required to be made.

National Highway Safety Administration

A federal agency responsible for achieving the highest standards of safety on the nation's roads and highways.

Motor Vehicles

Vehicles powered by an internal combustion engine or electric motor and are designed for transportation on roads.