Which financial statement shows the final balances of assets, liabilities, and owner's equity at the end of a period?

Which financial statement shows the final balances of assets, liabilities, and owner's equity at the end of a period?

• A. Income Statement
• B. Balance Sheet
• C. Cash Flow
• D. Ratio Analysis

Answer: (B)

A balance sheet is a snapshot of a business’s financial position at the end of a period, showing the final balances of assets, liabilities, and owner's (or shareholders') equity. It presents what the company owns, what it owes, and the residual interest of the owner at a specific date, and it adheres to the accounting equation: Assets = Liabilities + Owner's Equity. This makes it the go-to statement for assessing the company’s financial position as of that date. In contrast, the income statement tracks performance over the period by listing revenues and expenses to determine net income or loss, not the ending balances. The cash flow statement shows how cash moved during the period, broken down into operating, investing, and financing activities. Ratio analysis is a tool for interpreting relationships between numbers across statements, not a statement of position itself.

A balance sheet is a snapshot of a business’s financial position at the end of a period, showing the final balances of assets, liabilities, and owner's (or shareholders') equity. It presents what the company owns, what it owes, and the residual interest of the owner at a specific date, and it adheres to the accounting equation: Assets = Liabilities + Owner's Equity. This makes it the go-to statement for assessing the company’s financial position as of that date.

In contrast, the income statement tracks performance over the period by listing revenues and expenses to determine net income or loss, not the ending balances. The cash flow statement shows how cash moved during the period, broken down into operating, investing, and financing activities. Ratio analysis is a tool for interpreting relationships between numbers across statements, not a statement of position itself.