What does a balance sheet represent?

A balance sheet represents a snapshot of a company’s financial position at a specific point in time. It provides a comprehensive overview of the company’s assets, liabilities, and equity, allowing stakeholders to assess the financial health of the business.

Assets include everything the company owns that has value, while liabilities reflect what the company owes to external parties. The equity section represents the owners' claims after all liabilities have been settled. This information is crucial for investors, analysts, and management to evaluate the company’s capacity to meet its obligations, the efficiency of asset utilization, and overall net worth.

The other options do not accurately capture what a balance sheet represents. A summary of revenue and expenses relates to an income statement; a record of daily cash transactions pertains to cash flow statements; and a list of all liabilities only does not provide the complete picture that a balance sheet offers.