Question

1. Which of the following describes a balance sheet?

   1. Reports the amount and compositions of assets and liabilities at a specified point in time

   2. Reports cash receipts and cash disbursement for a specific accounting period

   3. Reports revenues and expenses for a specific accounting period

   4. Reports the amount and composition of assets and liabilities at a specific accounting period

Answer 1

The correct answer is :

Reports the amount and compositions of assets and liabilities at a specified point in time.

Note:

The Balance Sheet provides the details of the assets and liabilities of the company on a specific date. The Income Statement provides the details of the revenue and expenditures for a period of time ( say a year ). On the other hand , the cash flow statement provides the details of the cash inflows and outflows for a period of time. The Balance Sheet however provides the particulars of the assets and liabilities on a specific date.