1 To obtain financing for her hair salon Valcri asked you to

1. To obtain financing for her hair salon, Valcri asked you to prepare a balance sheet for her business. When she sees it, she is disappointed that the assets exclude a value for her list of loyal customers. What can you tell her to explain why this \"asset\" has been excluded? Knowing this, what should she tell her banker when they meet next weck? e

Solution

Part - 1

In Accounting, we keep records of financial transactions only and financial statements reflects financial position based on those transactions.
Definition of assets states that assets are those resource that the company owns and it can be measured and expressed in values.
Loyal customers are priceless to the business but it can\'t be measured or expressed in values.
The company can\'t claim any ownership on it and it is not convertible into cash.

Part 2

She should present these financial statements. It will show the performance of her business
And
She may present list of loyal customers as a supporting document which will indicate stability and future business of her salon.