What is described by a statement of financial position?

A statement of financial position, often referred to as a balance sheet, provides a comprehensive overview of an individual’s or business’s financial standing at a specific point in time. It outlines the assets owned, such as cash, property, and investments, alongside the liabilities owed, including debts and other obligations. The difference between assets and liabilities represents equity, reflecting the net worth. This snapshot is essential for understanding the overall financial health, which informs various decisions, including investment strategies, budgeting, and creditworthiness.

The other options focus on different aspects of financial reporting. A report of past investment performance emphasizes historical results and returns, summaries of monthly expenses and income relate to cash flow management, and projections of future growth involve forecasting, which are not reflected in a statement of financial position. Thus, the focus on current financial status makes option B the accurate choice.