What does a balance sheet provide?

A balance sheet provides a snapshot of a company's financial situation at a specific point in time. It presents a detailed outline of the company’s assets, liabilities, and shareholders’ equity, allowing stakeholders to assess the financial health and stability of the organization. This information is crucial for investors, creditors, and management, as it indicates what the company owns and owes, providing insights into its liquidity and capital structure.

The other options do not accurately describe a balance sheet. For instance, a performance summary over a financial period relates more to an income statement, which outlines revenues and expenses over a specified timeframe. A history of transaction records usually pertains to a cash flow statement or a ledger, tracking individual financial transactions. Lastly, a forecast of future earnings would be part of a budget or a projection report, focusing on anticipated financial performance rather than a current snapshot of financial standing.