Ask the Accountant

Ask the Accountant!

Q. What is the balance sheet?

A. The balance sheet can be viewed as a financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specified period.

It is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.

The formula to use when calculating the balance sheet is:

Assets = Liabilities + Shareholders’ Equity

Of course, it is more in-depth than the above, which is why it takes a number of years to become a qualified accountant; but we believe things make more sense when you begin to understand what they are or why they require to be done!