Balance sheet shows the financial situation of a company at a point in time (the balance sheet date). It includes assets, equity and liabilities. It shows the economic resources controlled by the company, existing obligations and the net assets of the required right of the owners.
The balance sheet is much more similar to the trial balance, being a balance of the ledger accounts after double-entry has been completed, and requiring that debits must equal credits. It’s an ordered list of the ledger account balances remaining once the income statement has been prepared. Through it, you can see the structure of total assets and total liabilities.
It reflects the economic resources controlled by the company and the assets for redeem the debt in the future. And you can see the situation of the owners, it reflects the share owned by the owners.
Balance sheet provides the basic data for financial analysis, such as current ratio, quick ratio and so on, you can know the ability to redeem short liabilities.
Here, there is a single format for the balance sheet.
Balance sheet is one of basic financial statements. You must know income statement, cash flow, accounting policies and explanatory notes. And you should understand the difference between the balance sheet and income statement, and know how to analyse the balance sheet.
