Which of the following is NOT one of the three categories of a balance sheet?

Which of the following is NOT one of the three categories of a balance sheet?

• A. Assets
• B. Revenue
• C. Liabilities
• D. Owner's equity

Answer: (B)

The balance sheet is a fundamental financial statement that summarizes a company's financial position at a specific point in time. It is structured around three main categories: assets, liabilities, and owner's equity. Assets represent everything the company owns, which can include cash, inventory, property, and equipment. Liabilities encompass all the obligations the company owes, such as loans, accounts payable, and other debts. Owner's equity reflects the residual interest in the assets of the company after all liabilities have been deducted. It essentially represents the owners' stake in the business. Revenue, on the other hand, is not included in the balance sheet. Instead, it is part of the income statement, which shows the company’s performance over a period by detailing income earned, expenses incurred, and ultimately profit or loss. The absence of revenue from the balance sheet highlights its distinct role in financial reporting, focusing on performance rather than financial position.

The balance sheet is a fundamental financial statement that summarizes a company's financial position at a specific point in time. It is structured around three main categories: assets, liabilities, and owner's equity.

Assets represent everything the company owns, which can include cash, inventory, property, and equipment. Liabilities encompass all the obligations the company owes, such as loans, accounts payable, and other debts. Owner's equity reflects the residual interest in the assets of the company after all liabilities have been deducted. It essentially represents the owners' stake in the business.

Revenue, on the other hand, is not included in the balance sheet. Instead, it is part of the income statement, which shows the company’s performance over a period by detailing income earned, expenses incurred, and ultimately profit or loss. The absence of revenue from the balance sheet highlights its distinct role in financial reporting, focusing on performance rather than financial position.