What is another name for the financial position statement used to summarize assets, liabilities, and equity at a specific date?

• A. Balance Sheet
• B. Income Statement
• C. Cash Flow Statement
• D. Statement of Retained Earnings

Answer: (A)

A balance sheet is a snapshot of a company’s financial position at a specific date. It lists what the company owns (assets) and what it owes (liabilities) plus the owners’ claim (equity), following the accounting equation: Assets = Liabilities + Equity. This point-in-time view distinguishes it from other statements that cover movement over a period. The income statement, for example, shows revenues and expenses over a period to reveal profit or loss, while the cash flow statement tracks cash inflows and outflows over a period. The statement of retained earnings tracks changes in retained earnings across a period. In some contexts this report is also called the statement of financial position, but balance sheet is the standard term.