What is Balance Sheet?
A balance sheet is a statement showing, on one date, what a business owns (assets), what it owes (liabilities) and what is left for the owner (equity).
Updated
Meaning
English
A balance sheet is a statement showing, on one date, what a business owns (assets), what it owes (liabilities) and what is left for the owner (equity).
Roman Urdu
Balance sheet ek tareekh par dikhati hai ke karobar ke paas kya hai, kis ka kitna dena hai aur malik ka hissa kitna bacha.
Also called statement of financial position.
Example
On 30 June a shop has stock worth 800,000 rupees, 100,000 in cash and 150,000 due from customers. It owes suppliers 300,000. The owner's share is the difference.
How to read it
Assets minus liabilities equals the owner's equity. For a shop, the main assets are cash, stock, money customers owe you and equipment. The main liabilities are supplier balances and loans. A profit and loss statement shows what happened over a period; the balance sheet is a photograph on one day.
Small shops often skip a full balance sheet, but the three numbers behind it are easy to track: stock value, receivables and payables.
In Nafaa
Nafaa shows stock value, customer balances and supplier balances in its reports, which are the working numbers an accountant uses to build a balance sheet. See business reports.
Related terms
- Profit and Loss Statement (P&L)
A profit and loss statement is a report of sales, costs and expenses over a period that shows whether the business made a profit or a loss.
- Accounts Receivable
Accounts receivable is the money customers owe a business for goods or services already supplied on credit.
- Accounts Payable
Accounts payable is the money a business owes its suppliers for goods or services it has received but not yet paid for.