Cash is reported on which of the following financial statements?

• A. Statement of Stockholders' Equity
• B. Statement of Retained Earnings
• C. Income Statement
• D. Balance Sheet

Answer: (D)

Verified step by step guidance

1. Understand the role of cash in financial accounting: Cash is considered a current asset and is reported on the financial statement that provides a snapshot of a company's financial position at a specific point in time.
2. Identify the purpose of each financial statement: The Balance Sheet reports a company's assets, liabilities, and equity at a specific date, while the other statements (Income Statement, Statement of Retained Earnings, and Statement of Stockholders' Equity) focus on performance and changes over a period.
3. Recognize that cash is classified as a current asset: Current assets are resources expected to be converted into cash or used up within one year, and cash itself is the most liquid asset.
4. Locate where cash is reported on the Balance Sheet: Cash is typically listed as the first item under the 'Current Assets' section of the Balance Sheet because of its liquidity.
5. Conclude that cash is not reported on the Income Statement, Statement of Retained Earnings, or Statement of Stockholders' Equity, as these statements serve different purposes and do not directly list assets like cash.