Final answer:
The assertion that comparing cash and marketable securities balances with similar companies can reveal fraud is false. It is crucial to evaluate the entire balance sheet and understand the intricacies of financial management to get a true sense of a company's financial integrity.
Step-by-step explanation:
Comparing cash and marketable securities balances with those of similar companies is usually not very helpful for detecting fraud, and therefore the answer to the question is false. Financial statements, including balance sheets, might show symptoms of fraud, but simply comparing cash and marketable securities balances may not provide significant insights due to differences in business models, financial strategies, and accounting practices.
Understanding what constitutes a company's bank capital, and how assets and liabilities are managed, including the asset-liability time mismatch, can give a clearer picture of the financial health of an institution. Entities also need to monitor coins and currency in circulation, which has an effect on the economy but does not directly indicate fraud.
A balance sheet is an essential accounting tool that lists assets and liabilities. A firm's T-account helps to visualize the balance between assets and liabilities, with net worth included on the liabilities side to balance the account to zero. For a bank, this net worth or bank capital is crucial and indicates whether a bank is healthy or bankrupt.