|
|
A balance sheet is one of the most often used financial statements that businesses rely on to measure their financial situation. It presents a snapshot of what a company's finances look like at a certain point in time, listing its assets, liabilities, and equity. For business owners, accountants, and investors, learning how to make a balance sheet is, therefore, important. To help you follow it step-by-step, here's how to make a balance sheet.
A balance sheet follows the basic accounting equation: Assets = Liabilities + Shareholders' Equity
Where Assets represent what the company owns. Liabilities represent what the company owes. Equity is the owners' claim after all liabilities have been settled (also called net worth).
The balance sheet is divided into two major sub-divisions, one to show assets on the left side and liabilities and equity on the right side. Both the sides should always balance, hence it is called a "balance" sheet.
|
Locked
