Which components are included in a balance sheet?

A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. The correct components of a balance sheet are assets, liabilities, and owners' equity.

Assets represent everything the company owns and expects to provide future economic benefits, such as cash, inventory, equipment, and real estate. Liabilities are obligations that the company owes to external parties, which might include loans, accounts payable, and other debts. Owners' equity reflects the residual interest in the assets of the company after subtracting liabilities, essentially showing what is owned by the shareholders.

This structure adheres to the fundamental accounting equation: Assets = Liabilities + Owners' Equity, which illustrates that the resources of a company (assets) are financed either by borrowing money (liabilities) or through the funds contributed by shareholders (owners' equity).

In contrast, the other options include components that do not belong to a balance sheet. For example, revenues and expenses are part of the income statement, while operating income and cash flow are related to different aspects of the company's financial performance. Thus, understanding that assets, liabilities, and owners' equity are the correct components of a balance sheet is crucial for analyzing a company's financial health.