The finance balance sheet is
A) the same as the accounting balance sheet, but it is based on market values.
B) the same as the accounting balance sheet, but it does not have to balance.
C) based on cash rather than accrual accounting.
D) profit.

Question

Quizplus · Accepted Answer

The finance balance sheet is similar to the accounting balance sheet, but it is based on market values instead of historical cost. It presents assets, liabilities, and equity at their current market values, providing a more accurate picture of a company's financial situation. Choice B is incorrect because a balance sheet, by definition, must balance. Choice C is incorrect because a finance balance sheet can use accrual accounting, although it may also include cash-based information. Choice D is incorrect because profit is a component presented on the income statement, not the balance sheet.

The Finance Balance Sheet Is