BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Dynamic financial reports
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Static financial reports
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Activity reports
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None of the above
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Detailed explanation-1: -A balance sheet is not a dynamic financial statement, it is static. The figures contained in a balance sheet can easily be influenced by factors such as inventories, depreciation or amortization. Financial managers can manipulate a company’s balance sheet to make out attractive to investors.
Detailed explanation-2: -Static reporting has been the standard since the invention of business. Static reporting takes information from a specific time period and compiles that information into a report. This type of report is usually created with the help of an application or processing tool.
Detailed explanation-3: -A balance sheet is a financial statement that reports a company’s assets, liabilities, and shareholder equity. The balance sheet is one of the three core financial statements that are used to evaluate a business. It provides a snapshot of a company’s finances (what it owns and owes) as of the date of publication.
Detailed explanation-4: -Static reports are based on important business data so they offer a certain value. However, dynamic reports allow the user to squeeze every last drop of value from the data presented.