In financial accounting, the balance sheet reports which type(s) of accounts?

• A. Real (permanent) accounts: assets, liabilities, and stockholders’ equity
• B. Only expense accounts
• C. Only revenue accounts
• D. Nominal (temporary) accounts: revenues and expenses

Answer: (A)

Verified step by step guidance

1. Understand the purpose of the balance sheet: it is a financial statement that reports a company's financial position at a specific point in time.
2. Recall that accounts in financial accounting are classified into two main categories: real (permanent) accounts and nominal (temporary) accounts.
3. Real (permanent) accounts include assets, liabilities, and stockholders' equity, and their balances carry over from one accounting period to the next.
4. Nominal (temporary) accounts include revenues and expenses, which are closed to retained earnings at the end of each accounting period and do not appear on the balance sheet.
5. Therefore, the balance sheet reports only real (permanent) accounts: assets, liabilities, and stockholders' equity.