A financial statement that reports the assets and claims to those assets at a specific point in time.
A balance sheet describes all of a companies assets and liabilities at a certain point in time.
- In the balance sheet the users see's
- all of a companies assets (accounts receivable, cash,inventories, supplies,buildings and non tangible assets).
The balance sheet also has the claims to those assets under the section
Liabilities and Stockholders'
In this section of the balance sheet the user see's Liabilities (which are basically bills that a company must pay to its creditors (Bank).
Examples of this include: Notes Payable and Accounts Payable.
Don't worry about how these two are different.
the second section of the Liabilities and Stock holder's of a balance sheet is the
Stockholders' Equity Section
In this section the users see Common Stock and Retained Earnings.
Common stock is the total amount of money brought into the company by investors (stockholders)
While the Retained earnings represents the amount of Net income that the company has kept for itself.