If an Investor Is Interested in the Solvency of a Company

question 52

Multiple Choice

If an investor is interested in the solvency of a company, he/she should analyze the

• A)balance sheet and income statement.
• B)income statement, balance sheet, and statement of cash flows.
• C)balance sheet and statement of cash flows.
• D)statement of cash flows only.

---

Definitions:

Money Economy

A system in which goods and services are traded using money as a medium of exchange rather than barter.

Barter Economy

An economic system where goods and services are exchanged directly for other goods and services without using money.

Double Coincidence

A situation in a barter system where two parties each hold an item the other wants, facilitating an exchange without the need for money.

Barter

The exchange of one good or service for another good or service; a trade.