Intermediate Accounting For Dummies

Chapter 6

Reporting Assets and Claims: Keeping Your Balance (Sheet)

In This Chapter

Finding out the difference between balance sheet sections

Classifying the balance sheet

Reporting assets, liabilities, and equity on the balance sheet

Understanding how ownership affects the equity section

This chapter provides a brief overview of the balance sheet, the financial statement showing a company’s assets, liabilities, and equity. The data on the financial statements gives people and businesses using them a bird’s-eye view of how well the business is performing. In this chapter, you see how to look at the balance sheet to identify how much debt the business owes and what resources it has to pay it.

I briefly explain the common assets a business may have and further break down the assets as either current or noncurrent (Part III of this book expands on the basics in this chapter). You also get info on long-term debt obligations businesses use to acquire their assets. As with assets, liabilities are classified as short and long term. I give you a brief heads-up on types of current liabilities ...