Balance Sheets show a business's financial position at a point in time and show which items?

• A. Assets and liabilities
• B. Profits
• C. Turnover
• D. Cash flows

Answer: (A)

A balance sheet is a snapshot of a business’s financial position at a specific moment. It shows what the business owns (assets) and what it owes (liabilities), with the owners’ claim (equity) balancing the two. This reflects the accounting equation: assets = liabilities + equity. Profits and turnover come from the income statement, which covers performance over a period, while cash flows come from the cash flow statement. So the balance sheet’s main items are assets and liabilities (plus equity), making that the best description.