Utah Contractor Practice Exam

A(n) _____ represents a company's financial position on a specified date.

1. Profit plan

2. Balance sheet

3. Income statement

4. ROI

The correct answer is: Balance sheet

A balance sheet provides a snapshot of a company’s financial position at a specific point in time, detailing assets, liabilities, and equity. This financial statement highlights what the company owns (assets), what it owes (liabilities), and the residual interest of the owners (equity). By presenting this information as of a particular date, stakeholders can assess the company's overall financial health and stability. In contrast, a profit plan outlines expected revenues and expenses over a period, serving as a financial guideline rather than a status report. An income statement, while important for understanding financial performance over a period, shows revenues, costs, and profits rather than a snapshot of financial standing at a single moment. Lastly, ROI, or return on investment, measures the profitability or efficiency of an investment but does not represent the overall financial position of the company at any specific date. Thus, the balance sheet is the only option that accurately reflects a company's financial standing at a set moment in time.