Balance
Also called: closing account or balance sheet
A balance sheet is a statement of all the assets, liabilities and equity of a company or organization. The balance sheet is usually presented in two columns: assets and liabilities. The balance sheet is a snapshot of the balance between assets and liabilities. The balance sheet provides insight into the equity position of a company.
Assets include assets, such as buildings, land, inventories, accounts receivable and cash. Liabilities include equity, creditors, loans and debts, which finance the assets. The economic value of assets differ from the book value or tax value, for example, due to the way assets are depreciated within the accounts.
The values of assets and liabilities should be balanced. The difference between assets and liabilities results in equity. The balance sheet is part of the financial statements, along with the income statement and notes to the documents.
