What is a balance sheet in accounting?

The balance sheet is just a more detailed version of the fundamental accounting equation—also known as the balance sheet formula—which includes assets, liabilities, and shareholders’ equity. Balance sheets are typically organized according to the following formula: Assets = Liabilities + Owners’ Equity The formula can also be rearranged like so:

What information can be found on a company's balance sheet?

As noted above, you can find information about assets, liabilities, and shareholder equity on a company's balance sheet. The assets should always equal the liabilities and shareholder equity. This means that the balance sheet should always balance, hence the name.

How is a balance sheet arranged?

Balance sheets are typically organized according to the following formula: Assets = Liabilities + Owners’ Equity The formula can also be rearranged like so: Owners’ Equity = Assets - Liabilities or Liabilities = Assets - Owners’ Equity A balance sheet must always balance; therefore, this equation should always be true.