What does a balance sheet report on a specific date?

A balance sheet is a financial statement that provides a snapshot of an organization's financial position at a specific point in time. It consists of three main components: assets, liabilities, and owner's equity.

Assets are what the organization owns and can include cash, accounts receivable, inventory, and property. Liabilities represent what the organization owes, such as loans and accounts payable. Owner's equity reflects the residual interest in the assets after deducting liabilities, effectively representing the owners' stake in the organization.

This structure allows stakeholders to assess the organization's financial health, understand its capital structure, and evaluate its ability to meet obligations. Since the balance sheet is focused on a specific date, it provides a clear picture of the financial standing at that moment, unlike other financial reports that may cover a period of time or focus on future projections.