Saturday, 4 March 2017

How to make balance

wikiHow to Make a Balance Sheet for Accounting Along with the income statement and the statement of cash flows, the balance sheet is one of the main financial statements of a business.[1] It shows a company's assets, liabilities, and equity accounts. Financial professionals will use the balance sheet to evaluate the financial health of the company. Part One of Four: Setting Up Your Balance Sheet  1 Use the basic accounting equation to make a balance sheets. This is Assets = Liabilities + Owner's Equity. Thus, a balance sheet has three sections: Assets, which are the resources owned; Liabilities, which are the company's debts; and Owner's Equity, which is contributions by shareholders and the company's earnings. The information needed to complete a balance sheet can be found on the company's general ledger where all financial transactions for a particular period will have been recorded.[2] In a balance sheet, the total sum of assets must equal the sum of liabilities and owner's equity. The asset accounts represent all the goods and resources that a company owns. The liability portion represents all of its debts. The equity portion represents contributions by owners (shareholders) and past earnings. Theoretically, all the assets of the company are either financed by borrowing, which is associated with the liability accounts, or are financed by past earnings and contributions from owners, which are associated with equity.[3]

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