Balance Sheet

Posted in Finance, Accounting and Economics Terms, Total Reads: 2870
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Definition: Balance Sheet


A balance sheet is one of the three important accounting statements. It is also referred to as the statement of financial position. It shows the financial position of a sole proprietorship, partnership, or any business organization at an instant of time.

The balance sheet is broadly divided into two vertical halves: the assets or uses of funds and liabilities & shareholder’s equity or sources of funds.

The assets side is further divided into parts such as current assets, fixed assets and further into single line items such as cash, inventory, PPE (Property, plants & equipment).

The liabilities side of the balance sheet is divided into current liabilities, non-current liabilities & shareholder’s equity with each single line item being short-term debt, long term debt, common stock etc.

Sample Balance Sheet Structure and Example : 


LiabilitiesAmountAssetsAmount
CapitalXXFixed AssetsXX
LoanXXCurrent AssetsXX
Accounts PayableXXAccounts receivablesXX
Owner's EquityXXInventoryXX

XYZ
XYZ


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