Jim and Andrea Kerslake want to open a restaurant. In need of cash, they ask their bank for a loan. With little knowledge of finance, the Kerslakes don't know how the lending process works. Explain to them the information provided to the bank by the income statement (statement of operations) and the balance sheet (statement of financial position). Indicate why a lender would require this information. The income statement reports the net loss). of a particular entity for a period such as a month or a year. Total The balance sheet reports the of the entity at a particular date. the resources the business has to work with. creditors. the portion of the business assets owned outright by the owner. equals net income (or Before lending money, the lender evaluates Jim and Andrea's ability to make the loan payments. Lenders will use the reported net income and other information in the financial statements to predict of the restaurant. Therefore, the bank requires the financial statements of the Kerslake's restaurant in order to make a decision about the loan. debts owed to