Using Financial Reports: Evaluating the Reliability of a Balance Sheet
Frances Sabatier asked a local bank for a $\$ 50,000$ loan to expand her small company. The bank asked Frances to submit a financial statement of the business to supplement the loan application. Frances prepared the following balance sheet.>Required:
The balance sheet has several flaws. However, there is one major deficiency. Identify it and explain its significance.
Using Financial Reports: Evaluating the Reliability of a Balance Sheet Frances Sabatier asked a local bank for a $\$ 50,000$ loan to expand her small company. The bank asked Frances to submit a financial statement of the business to supplement the loan application. Frances prepared the following balance sheet.
Required: The balance sheet has several flaws. However, there is one major deficiency. Identify it and explain its significance.