Business glossary
Balance sheet
A statement showing assets, liabilities and equity at a specific date.
Example
At a reporting date, a business has $15,000 of assets and $6,000 of liabilities. Its equity is $9,000 because assets = liabilities + equity.
How it differs from related terms
A balance sheet describes a position at one date. An income statement describes performance over a period. A profitable business can still have little cash if customers have not paid or funds are tied up in assets.
Frequently asked questions
What is an example of balance sheet?
At a reporting date, a business has $15,000 of assets and $6,000 of liabilities. Its equity is $9,000 because assets = liabilities + equity.
How should balance sheet be interpreted?
A balance sheet describes a position at one date. An income statement describes performance over a period. A profitable business can still have little cash if customers have not paid or funds are tied up in assets.