Balance sheet

1. Equivalent of a Snapshot or Photo of a company at a given moment

2. Usually done at the end of the year, can also be monthly or quarterly
3. Purpose- show how the values are distributed in a company at that
particular moment
 Assets
 Liabilities
 Stockholders’ equity
4. The assets are on the LEFT side- the economic resources that are owned
or are to be owned by the entity( cash,inventory,buildings)
 Short-term assets(current)- can be sold quickly-cash, short-term
investment, prepaid expenses, supplies, inventory, accounts
receivable, notes receivable
 Long-term assets(non-current)- long-term investments, land,
buildings, equipment, intangibles
5. On the RIGHT side
 Liabilities- the amount of financing provided by creditors
Short-term- accounts payable, taxes payable, notes payable,
unearned revenue, accrued expenses
Long-term mortgages and loans
 Stockholders’ equity- the amount of financing provided by owners
of the business and reinvested earnings
Long-term- contributed capital, retained earnings
THE LEFT AND RIGHT SIDE SHOUL ALWAYS BE IN BALANCE-
Accounting Equation
The business activities of the company will affect the balance sheet.