Question

Which of the following statements about the balance sheet is most correct? O The balance sheet provides information about the financial position of an organization as of a moment in time. O The balance sheet provides detailed information about the assets, liabilities, equity, revenues, and expenses of an organization. O The balance sheet is affected by changes in the net income of the organization. O Statements a. and c. are both correct. O Statements a, b, and c. are all correct.

Answer 1

Option d. Statements a and c are both correct

Balance sheet shows the financial position of the company i.e. assets, liabilities and equity of the company as on date. It does not take account of revenues and expenses. Revenues and expenses are shown in the income statement of an organization. Moreover, balance sheet is impacted by net income as the net income impacts Equity portion in the balance sheet in which any retained earnings is added to the shareholders equity.