Multiple Choice
Which financial statement reports an organization's financial position at a single point in time?
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1. Introduction to Accounting
The Financial Statements
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Which financial statement provides information as of a specific point in time?
A
Statement of Cash Flows
B
Statement of Retained Earnings
C
Balance Sheet
D
Income Statement
Verified step by step guidance1
Understand the purpose of each financial statement: The Balance Sheet provides a snapshot of a company's financial position at a specific point in time, while other statements like the Income Statement and Statement of Cash Flows cover a period of time.
Recognize the components of the Balance Sheet: It includes assets, liabilities, and equity, which are reported as of a specific date, making it unique among financial statements.
Compare the Balance Sheet to other financial statements: The Income Statement shows revenues and expenses over a period, the Statement of Cash Flows details cash inflows and outflows during a period, and the Statement of Retained Earnings explains changes in retained earnings over time.
Identify the key characteristic of the Balance Sheet: It is the only financial statement that provides information as of a specific point in time, rather than over a period.
Conclude that the correct answer is the Balance Sheet, as it aligns with the requirement of providing information at a specific point in time.
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