Question at position 4 The balance sheet shows ______.current employee salarieswhat the business owns and what the business owesonly net worthshareholder deferred revenue

Question

Question at position 4 The balance sheet shows ______.current employee salarieswhat the business owns and what the business owesonly net worthshareholder deferred revenue

BlackTom AI · Accepted Answer

The prompt asks us to restate the question and then evaluate each option in turn.
Option 1: 'current employee salaries' — This is not how the balance sheet is described. Salaries are typically an income statement item (expense) or, if unpaid, a current liability, but not the overall balance sheet itself. So this answer is incomplete and thus incorrect.
Option 2: 'what the business owns and what the business owes' — This accurately captures the essence of a balance sheet, which presents assets (what the business owns) and liabilities plus equity (what the business owes and the owners’ net worth). While the exact phrasing may vary, this option best represents the dual components shown on a balance sheet. Therefore, this choice is correct in conveying the balance sheet’s scope.
Option 3: 'only net worth' — Net worth corresponds to owner’s equity, but a balance sheet also includes assets and liabilities beyond just net worth. Limiting it to only net worth ignores the asset and liability sides, making this statement inaccurate.
Option 4: 'shareholder deferred revenue' — Deferred revenue is usually a liability, and the term 'shareholder deferred revenue' is not a standard or complete descriptor of what a balance sheet shows. This option introduces an unclear or incorrect concept, so it is not correct.
In summary, the reasoning for each option highlights why Option 2 best aligns with the balance sheet’s purpose, while the others either mischaracterize or misuse balance sheet concepts.

Question at position 4 The balance sheet shows ______.current employee salarieswhat the business owns and what the business owesonly net worthshareholder deferred revenue

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