Balance Sheets. The balance sheet shows an overall financial view, this can be helpful in purchasing decisions.

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Makenzie Shurtz

Accounting 557

Week 8 Assignment 1

5/23/2012

Professor Brandy

Strayer University

Balance Sheet in Accounting

A balance sheet is used in our everyday lives in several ways and we don’t even realize it, but it is very important. The balance sheet shows an overall financial view, this can be helpful in purchasing decisions. Individual’s personal finances are put into perspective and are more manageable looking at this view. A personal balance sheet allows a person to see if they are over spending on credit compared to paying cash. A balance sheet is a financial statement that reports the assets, liabilities, and owner’s equity at a specific date. The balance sheet is a snap shot of the financial situation at a specific time. With the economy suffering so severely this important sheet is crucial to benefit us and see what changes may need to be made financially.

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The asset part of the balance sheet list everything the company owns, like cash in their banking accounts etc., inventory, money owed to them from customers and long term assets such as property, land or equipment. This part helps analysts, investors and creditors understand what a business owns and what their objectives are.

The liability part of the balance sheet reports what the company owes. Current liabilities are financial obligations that are owed by the upcoming year. Accounts payable and short-term loans are examples of current liabilities. Long-term liabilities are obligations that the company expects to pay after ...

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