Finance
What is A balance sheet?
A balance sheet is a financial snapshot of what a company owns and owes at a moment in time. It lists assets on one side and liabilities plus owners' equity on the other — and the two sides always balance.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains a balance sheet.
Key things to understand
- 1It shows assets (what you own) vs liabilities (what you owe) plus equity.
- 2The core equation: Assets = Liabilities + Equity.
- 3It's a snapshot at a single date, unlike an income statement over time.
- 4It reveals financial health and how a business is funded.
Frequently asked questions
- What is on a balance sheet?
- Assets (cash, inventory, property), liabilities (debts), and owners' equity.
- What is the accounting equation?
- Assets = Liabilities + Equity — the rule that makes a balance sheet 'balance'.
- How is a balance sheet different from an income statement?
- A balance sheet is a snapshot in time; an income statement shows revenue and costs over a period.