Rita and Jose Hernandez want to assess their financial progress over the next few years. They have decided to take a reading of their status every New Year's Day. Which financial statement would they prepare each year?A. WillB. Cash-flow statementC. Balance sheetD. Federal income tax return

The correct answer is letter "C": Balance sheet.

Explanation:

For companies, the Balance Sheet is a statement of their net worth broken down into three sections: assets, liabilities, and equity. Assets are equal to liabilities plus equity. A balance sheet shows how much a company has, owes and invests in.

For individuals, a balance sheet will help them determine what their properties and debts are. The result, just like for companies, represents their net worth. Thus, Rita and Jose should make a balance sheet on their current belongings a liabilities to find out the differences of that report with others they can make inf the upcoming years.

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