What is a Balance Sheet?
A Balance Sheet summarises a business’ financial position at a specific time, normally the
end of an accounting period. Made up of three parts and presented in two sections as the
name suggests each section must balance. It shows...
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What is a Balance Sheet?
A Balance Sheet summarises a business’ financial position at a specific time, normally the
end of an accounting period. Made up of three parts and presented in two sections as the
name suggests each section must balance. It shows what assets and liabilities the business has
as well as how it is funded.
Assets = Liabilities – Shareholder’s Equity
An asset is anything that a business owns that has a monetary value; examples of which
include plant and machinery, stock, trade debtors and cash in the bank
A liability is something which a business owes to its creditors; examples of which include
amounts due to suppliers, taxes, loans and hire purchase.
Shareholder’s Equity is the difference between the assets and liabilities and represents the net
worth of the business.
Gwyneth Price lives in Wirral. She works as a financial adviser and takes great pride in her
work. She loves to share her experience online through a series of blog articles and guest
postings. For mo
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