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Basic Balance Sheet Example
Below I have provided a Basic Balance Sheet Example,
this is what you would expect to see from an a typical small business. The first thing I want to point out is the header, a Balance Sheet will always say 'For the Period Ending' and the date. Unlike many other financial reports which look at a defined period of time, like a month, quarter, or year, the balance sheet is created for a point in time, covering the business from inception to that date.
Next, before looking at the Basic Balance Sheet Example, lets think back to the Accounting Equation mentioned in the What is a Balance Sheet page
ASSETS = LIABILITIES + OWNERS EQUITY
All balance sheet's will follow this equation, and all will have the three main components, Assets, Liabilities, and Owners (or Shareholders) Equity, as headings.
Assets are resources of items of value owned by the company. These assets will be divided into Current, and Long Term on the balance sheet. The exact wording of the long term is often different form company to company, this example used Property & Equipment, also frequently used is 'Fixed Assets', and 'Property, Plant, and Equipment' (PPE). Regardless of the name, long term assets should always follow current assets. The Other Asset category may or may not be on a companys balance sheet, these are mainly intangible assets such as patents, goodwill, customer lists, things that have a value but are not the traditional current or long term.
Liabilities are items that the company is obligated to pay back. They are divided the same way assets are, into current and long term headings.
For a overview of what defines a current vs long term asset and liability, please go to the What is a Balance Sheet page.
The Owners Equity heading can have be called a number of things, mainly dependant on the structure of the business. 'Owners Equity' often implies the business is solely owned, Stockholders or Shareholders Equity would imply a company with outside investors besides the principal owners.
All balance sheets should have subtotals of the Current, Long Term, Other Assets and Owners Equity amounts. Also, grand totals of Assets and Liabilities + Owners Equity should be at the bottom of all balance sheets.
There you have it, a basic Balance Sheet example. Now, if you want to see where the numbers come from please continue on the the Make a Balance Sheet page.
Click here to leave the Basic Balance Sheet Example page and return to the Balance Sheet Understanding page, where more important Balance Sheet information can be found.
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