A contractor's income statement is prepared monthly, but the balance sheet is dated December 31. This is because:
Explanation
An income statement measures flow over an interval, so it is headed 'for the month ended', while a balance sheet reports position at an instant and is headed 'as of' a date. Either can be produced at any interval a business chooses, so nothing forces December 31 and nothing prevents a monthly balance sheet. And the last option reverses the two: the snapshot is the balance sheet, and reading it the other way round is the error this question exists to catch.
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