Which financial statement lists assets and liabilities?

Which financial statement lists assets and liabilities?

• A. Income statement
• B. Balance Sheet
• C. Cash flows
• D. Statement of changes in equity

Answer: (B)

The main concept here is identifying which financial statement shows a company’s resources and obligations at a specific moment in time. A balance sheet does that by listing what the company owns (assets) and what it owes (liabilities), along with shareholders’ equity. It’s based on the accounting equation: Assets = Liabilities + Equity, so it provides a snapshot of financial position. Assets include items like cash, accounts receivable, inventory, and equipment, while liabilities cover obligations such as accounts payable and debt. The balance sheet uniquely ties these together at a single date, unlike the income statement (revenues and expenses over a period), the cash flow statement (cash inflows and outflows), or the statement of changes in equity (changes in equity accounts over a period).

The main concept here is identifying which financial statement shows a company’s resources and obligations at a specific moment in time. A balance sheet does that by listing what the company owns (assets) and what it owes (liabilities), along with shareholders’ equity. It’s based on the accounting equation: Assets = Liabilities + Equity, so it provides a snapshot of financial position. Assets include items like cash, accounts receivable, inventory, and equipment, while liabilities cover obligations such as accounts payable and debt. The balance sheet uniquely ties these together at a single date, unlike the income statement (revenues and expenses over a period), the cash flow statement (cash inflows and outflows), or the statement of changes in equity (changes in equity accounts over a period).