Which financial statement reports a business's assets, liabilities and equity at a specific date?
Correct answer: B. Statement of financial position
- A. Income statement
- B. Statement of financial position
- C. Statement of cash flows
- D. Statement of changes in equity
Explanation
The statement of financial position presents the accounting equation at a particular date: assets equal liabilities plus equity. The income statement covers performance over a period, while the cash flow statement reports cash movements.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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