Which statement about the balance sheet is true?

• A. It lists assets and liabilities and owners' equity
• B. It lists revenues and expenses
• C. It lists cash flows only
• D. It lists only current assets

Answer: (A)

The balance sheet presents a snapshot of a company's financial position, listing what it owns (assets), what it owes (liabilities), and the owners' claim (owners' equity). This follows the fundamental equation: assets equal liabilities plus owners' equity. Because of that, the balance sheet correctly shows assets, liabilities, and owners' equity. Revenues and expenses appear on the income statement, not the balance sheet, and the cash flow statement covers cash inflows and outflows. A balance sheet includes both current and noncurrent assets, not just current assets, and it reflects a static position rather than performance or cash movement.