Certified Meeting Professional (CMP) Practice Exam

Which financial statement reflects total assets, liabilities, and net worth at a specific point in time?

1. Income statement

2. Balance sheet

3. Cash flow statement

4. Budget report

The correct answer is: Balance sheet

The balance sheet is the correct choice because it is a financial statement that captures a snapshot of an organization's financial position at a specific moment in time. It lists total assets, total liabilities, and the net worth (or equity) of the organization. This information is crucial for understanding the financial health of an entity, as it provides insights into what the organization owns versus what it owes. In contrast, the income statement focuses on the revenues and expenses over a period of time, providing insights into the profitability of the organization rather than its overall financial position at a specific moment. The cash flow statement details the inflows and outflows of cash during a specific period, which highlights how cash is generated and used but does not present a snapshot of assets and liabilities. Lastly, a budget report forecasts future income and expenses and is not a reflection of actual financial position at a single point in time.