Which is the best description of a balance sheet?

A statement that balances assets to liabilities and equity
A statement listing retained earnings
A list of outstanding debt compared to revenue
A comparison of revenue to SG&A and COGS

1 answer

The best description of a balance sheet is:

A statement that balances assets to liabilities and equity.

A balance sheet provides a snapshot of a company's financial position by showing what it owns (assets), what it owes (liabilities), and the residual interest of the owners (equity). The fundamental equation that underlies the balance sheet is: Assets = Liabilities + Equity.