What conclusion can the accountant draw from a balance sheet indicating low financial risk if a buyer proceeds with a transaction?

A balance sheet that indicates low financial risk typically suggests a strong financial position of the entity involved in the transaction. When assets exceed liabilities, it shows that the entity has sufficient resources to cover its obligations, which is a strong indicator of financial health.

Choosing the option stating that assets and liabilities balance each other does not accurately reflect a situation of low financial risk. If assets and liabilities are balanced, it means that the entity is neither in a particularly strong nor weak position; it simply indicates that the company has equal claims against its resources. This does not inherently convey low financial risk, as having liabilities equal to assets suggests that there is no buffer to absorb financial shocks.

In contrast, the correct conclusion to draw from a low financial risk assessment would be that assets exceed liabilities. This demonstrates a surplus of resources to meet obligations, thus providing a safer environment for a buyer to proceed with a transaction.