How to make balance sheet
Answers
Answer:
Explanation:
Knowing what a balance sheet is crucial. You can find our sample balance sheet at the end of the article.
A balance sheet is a snapshot of the financial condition of a business at a specific moment in time, usually at the close of an accounting period.
A balance sheet comprises assets, liabilities, and owners’ or stockholders’ equity. Assets and liabilities are divided into short- and long-term obligations, including cash accounts such as checking, money market, or government securities.
At any given time, assets must equal liabilities plus owners’ equity. An asset is anything the business owns that has monetary value. Liabilities are the claims of creditors against the assets of the business. So when you create a balance sheet, you must make sure that it balances. The way you do this is by increasing or decreasing the liabilities’ side of the sheet so that it equals the assets’ side. More specifically, the part of the liabilities’ side that you adjust is the owners’ equity.
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