ITPEC IP October 2024 Question 67

The financial condition on the settlement date, by assets, liabilities and net assets — the balance sheet is a snapshot at one date, not a record of a period.

A balance sheet lists what the company owns (assets) and how those are financed: by obligations to others (liabilities) and by the owners (net assets). It always balances, assets = liabilities + net assets, as at the closing date of the period.

Answer (d)

Why not others:

• •(a) — cash flow over a period by operating, investing and financing activities is the cash flow statement
• •(b) — income and costs over a period showing management performance is the income statement (profit and loss statement)
• •(c) — opening balance, changes and closing balance of each net-asset item is the statement of changes in equity (net assets)

Key rule: The balance sheet shows position at a point in time; the income statement, cash flow statement and statement of changes in equity each explain movements over a period.

Corporate Activities · AI-written, may contain errors