Balance Sheet

We've successfully created our income statement and statement of stockholders' equity. Now it's time for our last financial statement: the balance sheet!

Balance sheet explained

The balance sheet goes back to the OG accounting equation. It zones in on assets, liabilities, and equity and essentially provides proof that all three still align!

Assets = Liabilities + Equity

The balance sheet reports a company's total assets, liabilities, and equity at a given point in time. It essentially ensures that the accounting equation still holds true!

How to create a balance sheet

The balance sheet is segmented by assets, liabilities, and equity. It then goes one step further and segments accounts by the type of asset, liability, or equity they are!

Let's go one by one filling them out, starting with assets!

Assets

We'll start with current assets, which based on what we learned in Assets, Liabilities, & Equity, deal with the following accounts:

BALANCE SHEET

AccountAmount

ASSETS
Current Assets
Cash
Accounts Receivable
Inventory
Prepaid Insurance
Total Current Assets

Based on the pre-closing trial balance, these accounts have the following balances...

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