How to complete a Balance Sheet

What is a Balance Sheet?

A Balance Sheet is defined as a financial statement that reports a company’s assets, liabilities, and shareholder equity. This is reported using the below equation.

Assets = Liabilities + Share Holder Equity

What are Assets?

Assets are defined as property owned by a person or company, regarded as having value and available to meet debts, and commitments.

What are Liabilities?

Liabilities are defined as obligations of money or service owed to another person or entity that is not an owner of the business.

What is Share Holder Equity?

Share Holder Equity is defined as the remaining amount of assets available to shareholders after all liabilities have been paid.

While completing a balance sheet, please be advised that shareholder equity and liabilities must equal the listed assets. This means the difference between the company’s assets and liabilities will be the shareholder equity held by the business owner.