A balance sheet lists the assets, liabilities, and stockholders' equity as of a specific date. Which of the following correctly fills in the blank?

• A. liabilities
• B. revenues
• C. expenses
• D. dividends

Answer: (A)

Verified step by step guidance

1. Understand the purpose of a balance sheet: A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists assets, liabilities, and stockholders' equity.
2. Recall the components of a balance sheet: Assets represent what the company owns, liabilities represent what the company owes, and stockholders' equity represents the owners' residual interest in the company after liabilities are subtracted from assets.
3. Identify the missing term: The blank in the problem is asking for a term that fits within the structure of a balance sheet. Revenues, expenses, and dividends are not part of the balance sheet; they are part of the income statement or statement of retained earnings.
4. Match the correct term: Liabilities are part of the balance sheet and represent obligations the company owes to external parties, such as loans, accounts payable, or accrued expenses.
5. Conclude that the correct answer is 'liabilities,' as it aligns with the structure and purpose of the balance sheet.