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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.

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