The balance sheet lists which of the following?

• A. Cash inflows and outflows from operating, investing, and financing activities
• B. Dividends declared and paid during the period
• C. Assets, liabilities, and shareholders' equity
• D. Revenues, expenses, and net income

Answer: (C)

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 the company's assets, liabilities, and shareholders' equity.
2. Clarify the components of a balance sheet: Assets represent resources owned by the company, liabilities are obligations owed to others, and shareholders' equity represents the residual interest in the assets after deducting liabilities.
3. Differentiate the balance sheet from other financial statements: Unlike the cash flow statement (which shows cash inflows and outflows from operating, investing, and financing activities) or the income statement (which reports revenues, expenses, and net income), the balance sheet focuses on the financial position rather than performance or cash movements.
4. Recognize that dividends declared and paid during the period are not listed on the balance sheet: Dividends are typically reported in the statement of retained earnings or cash flow statement, not the balance sheet.
5. Conclude that the correct answer is 'Assets, liabilities, and shareholders' equity,' as these are the key components listed on the balance sheet.