Multiple choice

The Balance sheet of a business reveals ____

  1. Financial position of a business on a particular day

  2. Financial position of the business for a particular period

  3. Both of the above

  4. None of these
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A Correct answer
Explanation

A Balance Sheet is a POSITION statement showing the financial position of a business ON A PARTICULAR DAY (usually the year-end). It is not a flow statement - Profit & Loss Account shows position 'for a period'. Key distinction: Balance Sheet = snapshot (point of time), P&L = video (period of time).

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