What raw information does the Balance Sheet use?

The Balance Sheet is a fundamental financial statement that provides a snapshot of an entity's financial position at a specific point in time. It is structured around the accounting equation: Assets = Liabilities + Equity. This means that the Balance Sheet primarily uses information related to assets and liabilities to present a clear picture of what the company owns and what it owes.

Assets represent the resources the company controls that are expected to bring future economic benefits, while liabilities represent obligations that the company must settle in the future. The difference between total assets and total liabilities is the equity, which reflects the owner's residual interest in the assets after deducting liabilities.

While cash flow statements, income statements, and sales figures provide important financial information, they serve different purposes and are not the direct components of the Balance Sheet. Cash flow statements show the inflow and outflow of cash, income statements convey revenues and expenses over a period, and sales figures reflect the revenue generated from selling goods or services. Therefore, assets and liabilities are the key elements that underpin the Balance Sheet, making this the correct choice.