Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year.

Answer the following questions included as part of the hypothetical situation:

Is Colleen behaving in a professional manner by omitting some of the financial statements?

What types of information about their businesses would owners be willing to provide bankers?

What types of information would owners not be willing to provide?

What types of information about a business would bankers want before extending a loan?