A small business balance sheet statement provides you a snapshot of your company's financial status. This statement summarizes the company's assets and liabilities to arrive at a net worth. Understanding what each section of the statement includes and how all of the sections work together will help you build solid financial statements. Here's a look at what you should know before building a balance sheet for your company.
Section 1 – Assets
Assets comprise the first section of the balance sheet. This section details the company's use of funds for acquisition of various assets. The company's assets are the valuable items that the business owns.
Section 2 – Liabilities
The company's liabilities represent the company's creditors and investors.
Section 3 – Equity
The third and final section of the statement is the equity section. A company's equity represents the amount left when you reduce the assets by the total liabilities. Ideally, the company will have more assets than liabilities. Otherwise, the company owes more than it has available, which can be financially disastrous.
If you aren't comfortable creating statements like these on your own, work with a small business accounting professional (such as Teri J Henderson, CPA, P.A.) to help you get it done right.Share
15 June 2015
I have always dreamed of opening my own beauty salon, but never seemed to have the money to make that dream come true. I decided that it was time for me to hire an accountant to help me create a savings plan and to assist me in calculating how much money I would need to open my salon. I found out all about what it takes to start a business and a lot of great advice about what I can do to save the money I need to make it happen. If owning your own business is something you are dreaming of, my blog can help.