The balance sheet is also known as which of the following?

• A. Statement of net worth
• B. Income statement
• C. Cash flow statement
• D. Budget statement

Answer: (A)

The balance sheet is a snapshot of a company’s financial position at a specific moment, showing assets, liabilities, and the owner’s equity. That owner’s equity represents the net worth of the business, so this report is often called the Statement of Net Worth. It directly ties assets to what they owe plus the remaining value owned by the owners.

The other statements serve different purposes: the income statement tracks earnings over a period (revenues minus expenses), the cash flow statement tracks actual cash movements, and the budget statement outlines planned income and spending for the future.