Question:
Describe the purpose of the balance sheet.
Answer:
The purpose of the balance sheet, also known as the statement of financial position, is to present the
financial position of the company on a particular date. Unlike the income statement, which is a change
statement that reports events occurring during a period of time, the balance sheet is a statement that
presents an organized array of assets, liabilities, and shareholders’ equity at a point in time. It is a freeze-
frame or snapshot picture of financial position at the end of a particular day marking the end of an
accounting period.
Describe the purpose of the balance sheet.
Answer:
The purpose of the balance sheet, also known as the statement of financial position, is to present the
financial position of the company on a particular date. Unlike the income statement, which is a change
statement that reports events occurring during a period of time, the balance sheet is a statement that
presents an organized array of assets, liabilities, and shareholders’ equity at a point in time. It is a freeze-
frame or snapshot picture of financial position at the end of a particular day marking the end of an
accounting period.
