A balance sheet:
A) lists the assets and liabilities at present cash values.
B) shows how the resources of an entity change during a period of time.
C) shows all facts affecting the financial position of the entity.
D) lists the assets,liabilities and owners' equity at a specific point in time.

Question

Quizplus · Accepted Answer

A balance sheet is a financial statement that lists all the assets, liabilities and owners' equity at a specific point in time, usually at the end of an accounting period. It provides a snapshot of the entity's financial position and helps to assess its liquidity and solvency. The assets are listed in the order of their liquidity, i.e., how easily they can be converted into cash, and the liabilities in the order of their maturity, i.e., when they are due for payment. The owners' equity represents the residual interest in the assets after deducting the liabilities. Therefore, D is the best choice as it correctly describes the purpose and content of a balance sheet.

A Balance Sheet