Using A Balance Sheet Definition

A balance sheet definition explains what a balance sheet is.

A balance sheet is a complete view of how your business is doing financially. The balance can be prepared in one of two ways.

The first way is by using a general ledger and the other way is by adding all of the assets, liabilities and equities to your balance sheet.

The general ledger is accounting that includes the income statement and the cash flow statement (projection).  If this method is used the information added to the balance sheet will come from this form.  This way of accounting is called the double entry accounting.

The other way of adding items to the balance sheet is to simply add the assets, liabilities and the equities in their respective places on your form.

Assets = Liabilities + Owner's Equity

Step 1
The balance sheet is broken down into three main sections.

Step 2
The top section includes the company name, the title of the company and the time period of the form.

Step 3 
The assets section is one of the two sections below the top section.  This section includes all of the company’s assets.  The assets are the items the company owns which may include, accounts receivable, inventory, equipment, furniture, automobile, prepared expenses and so on.

Step 4
The liability section is on the other side of the asset section.  The liabilities may include items like, accounts payable, notes payable, interest payable, payroll accrual, long term liabilities, short term liabilities and so on.

Step 5
The equities can be included on the same side as liabilities.  The equities are shareholders and the owner’s equities (what the owner has put into it).  It includes such items as; capital, stock, retained earning and so on.

Step 6
Add up all of the assets.

Step 7 
Add up all of the liabilities and equities.

Step 8
If, the assets are more than the liabilities and equities you will have a net profit.  But, if the liabilities and equities are more than the assets you will have a net loss.

How to Use A Balance Sheet Definition?

Download Our Financial Statement E-book  that include sample;

Income Statements

Balance Sheet Statements

Cash Flow Statements

Balance Sheet Definition Help...

Balance Sheet Example
Your Balance Sheet Example is a quick view of the financial state of your business at a specific time period.

Balance Sheet Template
Your Balance Sheet Template is a printable Template that shows you the basics to doing a Balance Sheet for your business.

Sample Balance Sheet
A Sample Balance Sheet will help you write a Balance Sheet for your business. It will show you how to know the difference between Your companies Assets and its Liabilities.

Read A Balance Sheet
Find details about how to read a balance sheet.  Also find details about what is in a balance sheet and the three main sections in them and how you calculate them.

Balance Sheet Accounts
Locate information about using balance sheet accounts and how they can be very useful to running your business.  also find details about assets, liabilities and owner's equity.

Balance Sheet Analysis
Learn how to balance sheet analysis can help you with your business.  Also find information about assets, liabilities and owner's equity and how you can understand your business finances better.

Balance Sheet Definition
Understand how a balance sheet definition can help you to define you businesses finances.  Also learn how you will be able to understand a balance sheet better so that you can organize your business finances.

Prepare A Balance Sheet
Review details about what it takes to prepare a balance sheet for your business.  Also understand the steps preparing your balance sheet.  And how to understand the assets, liabilities and the owner's equities.

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