Which of the following questions would a balance sheet NOT be able to help answer about the current state of Streeter & Sons?
A) Is it a good time for the business to grow?
B) Can the company survive a season of low revenues?
C) Does the company have too many employees?
D) Can the company take on more debt?
E) What is the value of the company's assets?

Question

Quizplus · Accepted Answer

C)Although employees who have provided labor but not yet been paid represent a liability, salaries are considered not on the balance sheet but as operating expenses on the income statement. In any case, salary expenses may or may not indicate whether a company has too many employees. A balance sheet gives information about the level of a company's assets (Choice E)versus liabilities. This information can indicate whether the company has resources to grow (Choice A), can survive low revenues (Choice B), or has too much debt (Choice D).

Which of the Following Questions Would a Balance Sheet NOT