The balance sheet reports a company's total assets, liabilities, and equity at a given point in time. It ensures that the accounting equation still holds true!
Assets = Liabilities + Equity
To create the balance sheet, we'll take the Trial Balance account balances...
...and categorize the accounts by type (Asset, Liability, & Equity)!
It's critical to assess whether the total assets equal the total liabilities + equity! If they do, then you're in good shape!
PRO TIP: Don't assume that...
Sometimes, this doesn't occur!