Accounting 101: Balance Sheet

What is a Balance Sheet?

In layman’s term, Balance Sheet is the financial statement that shows your Networth (Ari-Arian) as of a certain period of time.

The elements of the Balance Sheet are Assets, Liabilities and Capital or Networth.

Assets are those putting money or value in your container, basket or pocket.

Liabilities are those putting away the money or value from your container, basket or pocket.

Capital, in accounting is referred to as “Networth.” It is what is left when we deduct the Liabilities from our Assets.

In Accounting, the formula of a Balance Sheet is this:

Assets = Liabilities + Capital (or Networth)