Understanding the Balance Sheet

A balance sheet is a crucial financial statement that summarizes the assets, liabilities, and equity of an entity at the moment in time. A company’s balance sheet will show funds owed by the company to investors or other entities such as banks on its asset side, along with the money it owes to those same creditors for any loans. The “equity” portion of the equation shows how much capital remains after all liabilities have been deducted from total assets. The corporation has this amount available to invest further into operations or possible expansion efforts. In this topic, we will be discussing the accounting equation, double-entry accounting, types of assets, types of liabilities and equity. The balance sheet will help provide balance to your business. It helps keep everything organized and on point.