The primary purpose of the balance sheet is to:
A) report the current value of the business.
B) measure the net income of a business up to a particular point in time.
C) report the difference between cash inflows and cash outflows for the period.
D) report the financial position of the reporting entity at a particular point in time.

Question

Quizplus · Accepted Answer

The primary purpose of the balance sheet is to report the financial position of the reporting entity at a particular point in time. It provides information on the assets, liabilities, and equity of the business, and serves as a snapshot of the company's financial standing. It does not measure the net income or cash flows for a particular period.

The Primary Purpose of the Balance Sheet Is To