What does balance sheet mean on the CPA exam?
Balance sheet. A snapshot at one date of what the entity owns, what it owes, and the owners' residual. Assets equal liabilities plus equity, always.
Defined against ASC 210-10-05.
Which CPA exam sections use balance sheet?
Balance sheet appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Other terms defined against ASC 210-10
- operating cycle: How long it takes to turn cash into inventory, inventory into a receivable, and the receivable back into cash.
Other names for balance sheet
statement of financial position
Related terms
- income statement: The statement of what was earned and spent over a period, ending in net income.
- financial statements: The formal set an entity publishes: balance sheet, income statement, statement of cash flows, statement of changes in equity, and the notes.
- rights and obligations: The assertion that the entity genuinely owns the assets it reports and genuinely owes the liabilities.
- total liabilities: Everything the entity owes, added up.
- subsequent event: Something that happens between the balance sheet date and the date the statements are issued.
- Type 1 subsequent event: A recognized subsequent event: it gives evidence about a condition that already existed at the balance sheet date, so the statements are adjusted.