Multiple Choice
Why does a publicly held corporation issue quarterly and annual reports?
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1. Introduction to Accounting
The Financial Statements
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is a characteristic of a balance sheet?
A
It reports a company's financial position at a specific point in time.
B
It lists assets, liabilities, and shareholders' equity.
C
It shows the company's revenues and expenses over a period of time.
D
It reports only cash transactions.
Verified step by step guidance1
Understand the purpose of a balance sheet: A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time.
Identify the key components of a balance sheet: It lists assets, liabilities, and shareholders' equity, which are the fundamental elements of the company's financial position.
Differentiate the balance sheet from other financial statements: Unlike the income statement, which shows revenues and expenses over a period of time, the balance sheet focuses on a single point in time.
Clarify misconceptions: A balance sheet does not report only cash transactions; it includes all assets, liabilities, and equity, whether cash-based or not.
Review the correct characteristics: The balance sheet reports a company's financial position at a specific point in time and lists assets, liabilities, and shareholders' equity.
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