The balance sheet shows the position of the entity:
A) at a point in time.
B) when it is insolvent only.
C) when it is making profits.
D) for a specified period of time.

Question

Quizplus · Accepted Answer

The balance sheet is a snapshot of the entity's financial position at a specific point in time, usually at the end of the financial year or reporting period. It shows the entity's assets, liabilities and equity at that specific moment. It does not depict the entity's profitability or solvency, but rather its financial health and liquidity.

The Balance Sheet Shows the Position of the Entity