2. Balance Sheet: Current Assets

The balance sheet complements the income statement, discussed in Chapter 1, “Working with Income Statements.” You need both reports to keep track of your company’s financial status. A balance sheet contains two primary sections:

Assets states the balances in the company’s asset accounts on a given date.

Liabilities and Equity states the balances in the company’s liability and its equity accounts on the same date.

These two sections must be in balance; that is, the total of the company’s assets ...

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