What is a Balance Sheet or Statement of Financial Position?

What is the Balance Sheet or Statement of Financial Position?

What is a balance Sheet?This statement explains the balance of the assets, liabilities and equity ledger accounts as at the reporting period.

As you can see in this example, the balance sheet relationship is represented by the Accounting Equation. Because of this logical equation, the balance sheet balances.

These balances carry forward into the next accounting period because they are ongoing measures of the business financial position.

balance sheet double entry

 

 

 


So the total of the assets on a balance sheet must equal the total of the liabilities and owners equity!

T account balance sheet

Because this topic is important, learn more and have a teacher explain this to you with examples and a quiz, take this Introductory Financial Reporting Tutorial Course Financial Reports Tutorial Course

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