You Are a Potential Creditor and Are Concerned That a Particular

question 167

Multiple Choice

You are a potential creditor and are concerned that a particular company you are ready to give a loan to might have too much debt. Which financial statement would provide you information needed in order to evaluate your concern?

• A)Balance Sheet
• B)Income Statement
• C)Statement of Retained Earnings
• D)Statement of Public Accounting

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Definitions:

Revenue Bond

A type of municipal bond supported by the revenue from a specific project or source, rather than general tax revenues.

General-Obligation Bond

A type of municipal bond that is secured by the full faith and credit of the issuing government, including its taxing power to repay the bondholders.

Russell 2000

A gauge that tracks the performance of around 2000 of the smallest American firms listed in the Russell 3000 Index.

S&P 500

A stock market index tracking the performance of 500 of the largest companies listed on stock exchanges in the United States.