Question

If you wanted to make sure a company has enough money available to pay its bills, which financial statement would

be most helpful?
A Balance sheet
В. Income statement
С. Statement of owners' equity
D. Cash flow statement

Answer 1

D. Cash flow statement

edg2021

Answer 2

A Balance sheet

Step-by-step explanation:

A balance sheet communicates the financial status of a business. It lists all the assets of the business on one side. On the side, it details the current assets, long-term assets, current liabilities, long-term liabilities, and equity.

Debts are liabilities to the company. Usually, a business uses its assets to pay its liabilities. If a company has a higher ratio of current assets to current liabilities, it means it is in a healthy state and can pay its debts as they become due.