I'm sure I look better without that cowboy hat on!
The Balance Sheet is made up of ASSETS, LIABILITIES and EQUITY, where the elements are presented true to THE ACCOUNTING EQUATION.
If you recall, the ACCOUNTING EQUATION is as follows: -
EQUITY = ASSETS - LIABILITIES
When you spin it around, the following equation is also true...
ASSETS = LIABILITIES + EQUITY
Here's an example of a Balance Sheet.
Remember - The Balance Sheet is always in balance, and never out of balance. In other words, there should be no differences arising.
Let's allow The Wallflowers to solidify this with a song called "The Difference".
Enjoy!!!
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