{"id":3245,"date":"2023-02-19T16:12:11","date_gmt":"2023-02-19T16:12:11","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-16-2-4-financial-statements\/"},"modified":"2023-07-30T15:18:30","modified_gmt":"2023-07-30T15:18:30","slug":"learn-it-16-2-4-financial-statements","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-16-2-4-financial-statements\/","title":{"raw":"Learn It 16.2.4: Financial Statements","rendered":"Learn It 16.2.4: Financial Statements"},"content":{"raw":"

Balance Sheet<\/h2>\r\nThe balance sheet<\/strong> lists the company\u2019s assets, liabilities, and equity (including dollar amounts) for a specific moment in time. That specific moment is the close of business on the date listed at the top of the balance sheet. A balance sheet is like a photograph; it captures the financial position of a company at a particular moment in time.\r\n\r\nYou can see from the example below that the balance sheet takes the information from the balance of accounts above and groups the items according to whether they are assets, liabilities, or equity.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Metro Courier Inc.<\/strong><\/td>\r\n<\/tr>\r\n
Balance Sheet<\/strong><\/td>\r\n<\/tr>\r\n
January 31, 20XX<\/strong><\/td>\r\n<\/tr>\r\n
Assets\u00a0<\/strong><\/td>\r\n<\/tr>\r\n
Cash<\/td>\r\n$ 66,800<\/td>\r\n<\/tr>\r\n
Accounts Receivable<\/td>\r\n5,000<\/td>\r\n<\/tr>\r\n
Supplies<\/td>\r\n500<\/td>\r\n<\/tr>\r\n
Prepaid Rent<\/td>\r\n1,800<\/td>\r\n<\/tr>\r\n
Equipment<\/td>\r\n5,500<\/td>\r\n<\/tr>\r\n
Truck<\/td>\r\n8,500<\/td>\r\n<\/tr>\r\n
Total Assets<\/strong><\/span><\/td>\r\n$ 88,100<\/strong><\/span><\/td>\r\n<\/tr>\r\n
Liabilities<\/strong><\/td>\r\n<\/tr>\r\n
Accounts Payable<\/td>\r\n$ 200<\/td>\r\n<\/tr>\r\n
Total Liabilities<\/strong><\/span><\/td>\r\n$ 200<\/strong><\/span><\/td>\r\n<\/tr>\r\n
Equity<\/strong><\/td>\r\n<\/tr>\r\n
Common Stock<\/td>\r\n$ 30,000<\/td>\r\n<\/tr>\r\n
Retained Earnings<\/td>\r\n57,900<\/td>\r\n<\/tr>\r\n
Total Equity<\/strong><\/span><\/td>\r\n$ 87,900<\/strong><\/span><\/td>\r\n<\/tr>\r\n
Total Liabilities + Equity<\/strong><\/td>\r\n$ 88,100<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n
You can see the accounting equation in action here on the balance sheet. Assets<\/mtext><\/mrow><\/mtd>=<\/mo><\/mtd>Liabilities<\/mtext><\/mrow><\/mtd>+<\/mo><\/mtd>Owners' equity<\/mtext><\/mrow><\/mtd><\/mrow><\/mtd><\/mtr>$88,100<\/mtext><\/mrow><\/mtd>=<\/mtext><\/mtd>$200<\/mtext><\/mrow><\/mtd>+<\/mo><\/mtd>$87,900<\/mtext><\/mrow><\/mtd><\/mtd><\/mtr><\/mtable><\/mrow><\/mrow><\/semantics><\/math><\/section>
[ohm2_question height=\"400\"]8604[\/ohm2_question]<\/section>","rendered":"

Balance Sheet<\/h2>\n

The balance sheet<\/strong> lists the company\u2019s assets, liabilities, and equity (including dollar amounts) for a specific moment in time. That specific moment is the close of business on the date listed at the top of the balance sheet. A balance sheet is like a photograph; it captures the financial position of a company at a particular moment in time.<\/p>\n

You can see from the example below that the balance sheet takes the information from the balance of accounts above and groups the items according to whether they are assets, liabilities, or equity.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Metro Courier Inc.<\/strong><\/td>\n<\/tr>\n
Balance Sheet<\/strong><\/td>\n<\/tr>\n
January 31, 20XX<\/strong><\/td>\n<\/tr>\n
Assets\u00a0<\/strong><\/td>\n<\/tr>\n
Cash<\/td>\n$ 66,800<\/td>\n<\/tr>\n
Accounts Receivable<\/td>\n5,000<\/td>\n<\/tr>\n
Supplies<\/td>\n500<\/td>\n<\/tr>\n
Prepaid Rent<\/td>\n1,800<\/td>\n<\/tr>\n
Equipment<\/td>\n5,500<\/td>\n<\/tr>\n
Truck<\/td>\n8,500<\/td>\n<\/tr>\n
Total Assets<\/strong><\/span><\/td>\n$ 88,100<\/strong><\/span><\/td>\n<\/tr>\n
Liabilities<\/strong><\/td>\n<\/tr>\n
Accounts Payable<\/td>\n$ 200<\/td>\n<\/tr>\n
Total Liabilities<\/strong><\/span><\/td>\n$ 200<\/strong><\/span><\/td>\n<\/tr>\n
Equity<\/strong><\/td>\n<\/tr>\n
Common Stock<\/td>\n$ 30,000<\/td>\n<\/tr>\n
Retained Earnings<\/td>\n57,900<\/td>\n<\/tr>\n
Total Equity<\/strong><\/span><\/td>\n$ 87,900<\/strong><\/span><\/td>\n<\/tr>\n
Total Liabilities + Equity<\/strong><\/td>\n$ 88,100<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
You can see the accounting equation in action here on the balance sheet. Assets<\/mtext><\/mrow><\/mtd>=<\/mo><\/mtd>Liabilities<\/mtext><\/mrow><\/mtd>+<\/mo><\/mtd>Owners’ equity<\/mtext><\/mrow><\/mtd><\/mrow><\/mtd><\/mtr>$88,100<\/mtext><\/mrow><\/mtd>=<\/mtext><\/mtd>$200<\/mtext><\/mrow><\/mtd>+<\/mo><\/mtd>$87,900<\/mtext><\/mrow><\/mtd><\/mtd><\/mtr><\/mtable><\/mrow><\/mrow><\/semantics><\/math><\/section>\n