Which of the following statements about the balance sheet is FALSE?
A)The balance sheet reports financial position.
B)The balance sheets from two periods show whether cash increased or decreased.
C)The balance sheet explains why cash increased or decreased from the prior period.
D)The balance sheet is a basic financial statement required for publicly-held companies.

Question

Quizplus · Accepted Answer

The balance sheet reports financial position and provides information on a company's assets, liabilities, and equity. It can show whether cash increased or decreased from the prior period, but it does not explain why. Rather, changes in cash are typically explained in the cash flow statement. Additionally, while the balance sheet is a required financial statement for publicly-held companies, it is also used by privately-held companies and organizations.

Which of the Following Statements About the Balance Sheet Is