Question

In vertical balance sheet application of funds

Answer 1

Explanation:

Sources of funds include cash farm receipts, capital asset sales, increases in liabilities, outside equity capital infused into the business, and net non-farm cash income. The increase in total liabilities is derived from the beginning and ending balance sheets.

The intent of a vertical balance sheet is for the reader to make comparisons between the numbers on the balance sheet for a single period. For example, someone might compare the current assets total to the current liabilities total to estimate the liquidity of a business as of the balance sheet date.

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