Statement of financial position information is useful for all of the following except to
A) compute rates of return
B) analyze cash inflows and outflows for the period
C) evaluate capital structure
D) assess future cash flows

Question

Quizplus · Accepted Answer

Statement of financial position information (also known as balance sheet information) provides information about an entity's assets, liabilities, and equity at a specific point in time. While it can provide information about a company's capital structure (C) and future cash flows (D) to some extent, its primary use is not to analyze cash inflows and outflows for the period (B), but rather to provide a snapshot of the entity's financial position. Computing rates of return (A) can also be done using other financial statements such as the income statement and cash flow statement.

Statement of Financial Position Information Is Useful for All of the Following