Chapter 3
Reporting Financial Condition in the Balance Sheet
IN THIS CHAPTER
Interpreting the balance sheet
Categorizing business transactions
Connecting revenue and expenses with their assets and liabilities
Examining where businesses go for capital
Understanding values in balance sheets
This chapter explores one of the three primary financial statements reported by business and not-for-profit entities: the balance sheet, which is also called the statement of financial condition and the statement of financial position. This financial statement summarizes the assets of a business and its liabilities and owners’ equity sources at a point in time, almost always at the end of the income statement reporting period. The balance sheet is a two-sided financial statement that lists assets on the left and liabilities and owners’ equity on the right.
The balance sheet may seem to stand alone because it’s presented on a separate page in a financial report, but keep in mind that the assets and ...
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