Question

Balance sheet is prepared to ascertain _________________.

• A. Profit or Loss
• B. Finacial Position
• C. Errors of Accounts
• D. Balance of Accounts

Answer 1

The correct option is B Finacial Position

A balance sheet is a statement of the financial position of a business which states the assets, liabilities and owner's equity at a particular point in time. In other words, the balance sheet shows the financial position on a particular date. In general it is divided into assets, liabilities and equity. It can be used to compare financial position from the previous years and to track the growth of the company. You can also use the balance sheet to determine how to meet your financial obligations and figure out the best ways in which you can use credit to finance your operations.