Question

With regards to a Balance Sheet, identify which of the following statements are true:

1. It is made on a particular date.
2. It calculates the Net Profit or Net Loss.
3. It is a statement of Assets and Liabilities.
4. Debit side records expenses and credit side records income.

Options

• I and II are true.

• II and III are true.

• I and III are true.

• II and IV are true.

Answer 1

I and III are true.

Explanation:

A balance sheet is prepared on a particular date and presents assets and liabilities; it does not calculate net profit or loss (that’s the Profit & Loss account) nor record expenses/income as debit/credit sides.