Explain to linda why financial statements are needed

Reference no: EM132717802

Case Study (Graded Assignment): Directions: You are the assistant to a loan officer for a bank. You recommended the approval of loans based on the financial standing of an individual or a business. One of your current customers is Linda Wynn, the owner of a travel service that has just completed its first year of operation and is now asking for a loan of $10,000. The only financial information received is an unadjusted trial balance. Linda tells you this report demonstrates that she is in good financial standing and should be granted the loan without any additional information.

Explain to Linda why financial statements are needed and that they are more useful than an unadjusted trial balance and why it is improper for you to recommend approval of a loan based only on what she has provided. Your explanation should be written in a paragraph or two with the inclusion of an appropriate accounting principle.

Reference no: EM132717802

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