Which financial statement shows a firm’s assets and liabilities at a specific date?

Which financial statement shows a firm’s assets and liabilities at a specific date?

• A. Income Statement
• B. Balance Sheet
• C. Cash Flow Statement
• D. Statement Of Changes In Equity

Answer: (B)

The main idea here is that a balance sheet shows a firm’s financial position at a specific moment in time. It lists what the company owns (assets) and what it owes (liabilities), with the owners’ claim (equity) balancing the two. This is grounded in the accounting equation: Assets = Liabilities + Equity, and it must balance as of that date. This snapshot contrasts with other statements that cover a period: the income statement records revenues and expenses over a period; the cash flow statement tracks cash movements over a period; and the statement of changes in equity shows how owners’ equity changes during a period.

The main idea here is that a balance sheet shows a firm’s financial position at a specific moment in time. It lists what the company owns (assets) and what it owes (liabilities), with the owners’ claim (equity) balancing the two. This is grounded in the accounting equation: Assets = Liabilities + Equity, and it must balance as of that date. This snapshot contrasts with other statements that cover a period: the income statement records revenues and expenses over a period; the cash flow statement tracks cash movements over a period; and the statement of changes in equity shows how owners’ equity changes during a period.