Skip to content
Know.itKnow.it
Create an animated lesson
On request

This article is free to read. Creating a lesson uses your daily or stored credits; review the language and settings before starting.

What is a balance sheet?

FinanceLesson on requestFree to read

Quick answer

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.

Key things to understand

  1. It shows assets (what you own) vs liabilities (what you owe) plus equity.
  2. The core equation: Assets = Liabilities + Equity.
  3. It's a snapshot at a single date, unlike an income statement over time.
  4. It reveals financial health and how a business is funded.

People also ask

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.