{"id":38953,"date":"2015-07-23T13:38:19","date_gmt":"2015-07-23T08:08:19","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=38953"},"modified":"2024-04-03T13:22:57","modified_gmt":"2024-04-03T07:52:57","slug":"understanding-the-balance-sheet","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/understanding-the-balance-sheet\/","title":{"rendered":"UNDERSTANDING THE BALANCE SHEET"},"content":{"rendered":"<p style=\"text-align: center\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/07\/UNDERSTANDING-THE-BALANCE-SHEET.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-39075\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/07\/UNDERSTANDING-THE-BALANCE-SHEET.jpg\" alt=\"UNDERSTANDING THE BALANCE SHEET\" width=\"276\" height=\"183\"><\/a><\/p>\n<p>A balance sheet summarizes what a business owns and what it owes.It is one of the key financial statements and is a snapshot of the financial position of a business at a point in time.<\/p>\n<p>*<strong>What a business owns:<\/strong> The top half of the balance sheet contains the different assets a business owns, which are:<br \/>\n<strong>&gt;&gt;<\/strong>Long-term(non-current) assets, such as property, plant and &nbsp;equipment, intangibles and investments.<br \/>\n<strong>&gt;&gt;<\/strong>Short-term(current) assets, such as inventory, money owned by customers and cash.<\/p>\n<p>*<strong>What a business owes:<\/strong> The &nbsp;bottom half of the balance sheet contains the different liabilities a business owes to &nbsp; &nbsp; &nbsp;shareholders and other third parties, which are:<br \/>\n<strong>&gt;&gt;<\/strong>Equity, which consists of &nbsp;share capital and retained earnings.&#8221;Retained earnings&#8221; or &#8220;retained profits&#8221; are &nbsp;unspent or non-distributed profits, which are retained in a business for future use.They effectively belong to the &nbsp;shareholders and are therefore a liability of the business.<br \/>\n<strong>&gt;&gt;<\/strong>Long-term(non-current) liabilities, such as loans from a bank.<br \/>\n<strong>&gt;&gt;<\/strong>Money owed to suppliers and the other creditors.<\/p>\n<p>*<strong>Why a balance sheet balances:<\/strong> The top half of the balance sheet will equal the bottom half of the balance sheet due &nbsp;to the principle of double entry book keeping &#8211; every debit has an equal and opposite credit.A business&#8217;s assets (its &nbsp;debits) will equal its liabilities(its credits).The exact format of a balance sheet will depend upon the type of business &nbsp;and associated accounting conventions.<\/p>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/accounting-banking-and-finance\">Click here for government certification in Accounting, Banking &amp; Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A balance sheet summarizes what a business owns and what it owes.It is one of the key financial statements and is a snapshot of the financial position of a business at a point in time. *What a business owns: The top half of the balance sheet contains the different assets a business owns, which are:&#8230;<\/p>\n","protected":false},"author":1274,"featured_media":39075,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[2267,2090,5459,2563],"class_list":["post-38953","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-assets","tag-balance-sheet","tag-financial-statement","tag-liabilities"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>UNDERSTANDING THE BALANCE SHEET - Vskills Blog<\/title>\n<meta name=\"description\" content=\"What a business owns, what a business owes, why a balance sheet balances. 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