Final answer:
The financial statements prepared by the federal government using the accrual basis of accounting are called the Statement of Net Cost. In contrast, the balance sheet used by banks lists assets, liabilities, and net worth, showing a bank's financial health.
Step-by-step explanation:
The accounts that comprise the accrual basis financial statement prepared by the federal government and its agencies are called the Statement of Net Cost. This is different from traditional financial statements such as the balance sheet or income statement used in the private sector. The Statement of Net Cost is designed to show the costs incurred by a federal agency during a period and is part of the federal government's move to accrual accounting to better reflect the economic substance of the government's financial activities.
A balance sheet, as an accounting tool, lists assets and liabilities, showing the net worth of an entity. Assets include items of value owned, like cash and property, while liabilities represent debts owed, such as mortgages or loans. The net worth is the asset value minus the liabilities. Banks, for example, use balance sheets to display their financial health, showing assets such as cash held in vaults or loans made to customers, against liabilities including customer deposits and net worth, which is also referred to as bank capital.