The balance sheet is prepared to reveal

  • A The result of the operations for the period under review
  • B The financial position of the business
  • C The arithmetical accuracy of the ledger accounts
  • D The accruals and payment
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The correct answer is B. The financial position of the business

The purpose of the balance sheet is to reveal the financial status of a business as of a specific point in time. The statement shows what an entity owns (assets) and how much it owes (liabilities), as well as the amount invested in the business (equity).

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