SIE Exam Question 194: Answer and Explanation

Question: 194

Which financial statement shows the company's assets, liabilities, and shareholders' equity?

• A. Income statement
• B. Balance sheet
• C. Cash flow statement
• D. Annual report

Correct Answer: B

Explanation:

The balance sheet is a summary report of a company's assets and liabilities, along with stockholder equity. The income statement reports a company's revenue over a specified time period, along with the expenses the company incurred to generate that revenue. The cash flow statement provides a summary of a company's cash flow and other events that caused changes in their cash position. An annual report is a document describing operations and financial position that every company listed on the stock market must provide to its shareholders.