Balance Sheet

A statement of assets and liabilities which is prepared to show the financial position of business on the last date of accounting period is called balance sheet.

A plan that summarizes a company's assets, liabilities and shareholders' equity at a selected purpose in time. These 3 record segments offer investors a concept on what the corporate owns and owes, furthermore because the quantity invested with by the shareholders.

The record should follow the subsequent formula:

Assets = Liabilities + Shareholders' Equity

It's referred to as a record as a result of the 2 sides balance out. This makes sense: a corporation has to pay for all the items it's (assets) by either borrowing money (liabilities) or obtaining it from shareholders (shareholders' equity).

Each of the 3 segments of the record can have several accounts among it that document the worth of every. Accounts like money, inventory and property are on the plus facet of the record, whereas on the liability facet there are accounts like accounts due  or long term debt. The accounts on a record can dissent by company and by trade, as there's nobody set templet that accurately accommodates for the variations between differing types of companies.

Example Company
Balance Sheet
December 31, 2011

ASSETS					LIABILITIES
Current assets					Current liabilities
	Cash		$   2,100			Notes payable		$   5,000
	Petty cash		100			Accounts payable		35,900
	Temporary investments		10,000			Wages payable		8,500
	Accounts receivable - net		40,500			Interest payable		2,900
	Inventory		31,000			Taxes payable		6,100
	Supplies		3,800			Warranty liability		1,100
	Prepaid insurance		1,500			Unearned revenues		1,500
		Total current assets	89,000				Total current liabilities	61,000
-
Investments			36,000		Long-term liabilities
						Notes payable		20,000
Property, plant & equipment						Bonds payable		400,000
	Land		5,500				Total long-term liabilities	420,000
	Land improvements		6,500
	Buildings		180,000
	Equipment		201,000		Total liabilities			481,000
	Less: accum depreciation		(56,000)
		Prop, plant & equip - net	337,000
-
Intangible assets					STOCKHOLDERS' EQUITY
	Goodwill		105,000			Common stock		110,000
	Trade names		200,000			Retained earnings		229,000
		Total intangible assets	305,000			Less: treasury stock		(50,000)
							Total stockholders' equity	289,000
Other assets			3,000
-
Total assets			$770,000		Total liab. & stockholders' equity			$770,000