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Balance Sheet

 

The basic layout of the balance sheet reflects the fundamental accounting equation: assets = liabilities + owner's equity. It's called a balance sheet because it reflects the account balances as of a specific date. it also has to balance--the sum of the balances on the left hand side has to equal the sum of the balances on the right hand side.

Assets Liabilities + Owner's Equity
Cash Accounts payable
Accounts receivable Other short term liabilities
Notes receivable Long term debt
Inventory Owner's equity
Fixed assets Retained earnings
Total assets Total liabilities and owner's equity

 

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Copyright 2004 Gerald M. Myers. All rights reserved. This site has been developed as aid to instructors and students in managerial accounting. The scenarios contained herein are not intended to reflect effective or ineffective handling of managerial situations. Any resemblance to existing organizations is purely coincidental.
Last modified: August 03, 2005