A balance sheet provides a snapshot of a company’s financial position at a specific point in time by showing what the company owns and owes, and the residual value attributable to owners. The core balance sheet equation is Assets = Liabilities + Shareholders’ Equity. That is why the best description among the choices is “assets, debts, and the amount invested in the company”—assets correspond to resources owned, debts correspond to liabilities owed, and the “amount invested” corresponds to equity (often including paid-in capital and retained earnings). This aligns with how fundamental analysis uses financial statements to evaluate issuer health, leverage, and capitalization.
Choice A (revenues and expenses) describes an income statement, which measures operating performance over a period of time (e.g., a quarter or a year), not a point-in-time snapshot. Choice B is misleading: while a balance sheet is indeed “at a specific point in time,” it does not show “earnings” at a point in time. Earnings are generated over a period and appear on the income statement; the balance sheet may reflect accumulated earnings through retained earnings, but it is not an earnings statement. Choice C is incorrect because the balance sheet does not include the “number of investors” as a standard line item. Public companies disclose shares outstanding elsewhere, but investor count is not a balance sheet category.
For SIE purposes, the key is recognizing which statement answers which question: balance sheet = financial position (assets, liabilities, equity), income statement = profitability (revenue, expenses, net income), and cash flow statement = sources/uses of cash.
