Balance Sheets

AccountingIntermediate Level

10 flashcards

Card 1 of 1010%

Question

What is the primary purpose of a balance sheet?

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Answer

Definition

A balance sheet provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and equity.

Example

At the end of the fiscal year, Company A prepares a balance sheet to show it has $500,000 in assets and $300,000 in liabilities, giving it $200,000 in equity.

Quick Tip

Think of it as a financial photo at a moment in time.

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