Which term is the financial statement that lists the assets, liabilities, and capital of a business at a specific date?

• A. Income Statement
• B. Balance Sheet
• C. Net income
• D. Statement of Cash Flows

Answer: (B)

This asks you to identify which financial statement provides a snapshot of a business's financial position at a specific date. The balance sheet is the one that lists assets, liabilities, and capital (owner’s equity) as of a single date. It shows what the company owns, what it owes, and the owner’s stake in the business, reflecting the fundamental equation: Assets = Liabilities + Owner's Equity.

This is different from the income statement, which covers a period of time and shows revenues and expenses to arrive at net income, or loss. It’s also not the statement of cash flows, which tracks cash inflows and outflows over a period. So, for a moment-in-time view of the company’s financial position, the balance sheet is the correct choice.