Which of the following best describes what the balance sheet lists?

• A. Changes in shareholders’ equity (e.g., stock issuances, dividends, and net income) over a period of time
• B. Revenues and expenses over a period of time, resulting in net income or loss
• C. Cash inflows and outflows from operating, investing, and financing activities over a period of time
• D. Assets, liabilities, and shareholders’ equity at a specific point in time

Answer: (D)

Verified step by step guidance

1. Understand that the balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time.
2. Recognize the three main components listed on the balance sheet: assets, liabilities, and shareholders' equity.
3. Recall that assets represent what the company owns, liabilities represent what the company owes, and shareholders' equity represents the owners' residual interest in the company.
4. Note that unlike the income statement or cash flow statement, the balance sheet does not show changes over a period of time but rather the balances as of a particular date.
5. Therefore, the balance sheet lists assets, liabilities, and shareholders' equity at a specific point in time.