The purpose of the statement of financial position is:
A) to determine the cash inflows and outflows over a period of time.
B) to determine the profit earned over a period of time.
C) to list the assets of the business and the claims against the assets at a particular point of time.
D) all of the above.

Question

Quizplus · Accepted Answer

The purpose of the statement of financial position, also known as the balance sheet, is to list the assets of the business and the claims against the assets at a particular point of time. It does not determine cash inflows and outflows or profit earned over a period of time, as those are determined by the cash flow statement and income statement, respectively.

The Purpose of the Statement of Financial Position Is