Final answer:
A balance sheet summarizes the financial position of the practice at a certain point in time and shows all of the assets and liabilities of the practice.
Step-by-step explanation:
The document that summarizes the financial position of a practice at a certain point in time and shows all the assets and liabilities of the practice is called a balance sheet.
A balance sheet reflects the net worth of a company, calculated as total assets minus total liabilities, often referred to as the company's capital in the context of a bank. The balance sheet is a critical element for assessing the financial health of any business, including a bank, which lists its cash reserves, loans to customers, bonds, and deposits made at the bank as liabilities.
The balance sheet is akin to a snapshot that captures the financial standing of a practice, illustrating what the practice owns and owes. This financial report provides a clear view of the entity's solvency and financial stability, which is essential for making informed financial decisions, evaluating investment potential, and assessing the likely financial future of the organization.