Which of the following is not one of the three major components of a balance sheet?

• A. Assets
• B. Liabilities
• C. Expenses
• D. Members' Equity

Answer: (C)

A balance sheet is a snapshot of the association’s financial position at a moment in time, showing what it owns (assets), what it owes (liabilities), and the owners’ or members’ residual interest (equity or net assets). Expenses are costs incurred to operate during a period and belong on the income statement, not on the balance sheet. They reduce net income and, over time, can affect equity, but they are not listed as a separate component of the balance sheet. That’s why expenses are not one of the major components of the balance sheet.