Balance sheet

In formal bookkeeping and accounting, a balance sheet is a statement of the book value of a business or other organization or person at a particular date, usually at the end of its "fiscal year," as distinct from an income statement, also known as a statement of profit and loss (P&L), which records revenue and expenses over a specified period of time. A balance sheet is often described as a "snapshot" of the company's financial condition on a given date. Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time, instead of a period of time.

Related Topics:
Formal bookkeeping and accounting - Fiscal year - Income statement - Statement of profit and loss - Financial statements

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The balance sheet has two parts: assets on the left-hand ("debit") side or at the top and liabilities on the right-hand ("credit") side or at the bottom. The assets of the company -- money ("in hand" or owed to it), investments (including securities and real estate), and other property -- are equal to the claims for payments of the persons or organisations owed -- the creditors, lenders, and shareholders. This standard format for balance sheets is derived from the principle of double-entry bookeeping.

Related Topics:
Assets - Liabilities - Shareholder - Double-entry bookeeping

~ ~ ~ ~ ~ ~ ~ ~ ~ ~