The Purpose of the Balance Sheet
The balance sheet is the third financial statement of a sole proprietorship. It is a financial statement showing the financial position of an enterprise by summarizing its assets, liabilities, and owner’s equity at a given point in time. It is usually created at the close of the last day of the month or year.
In brief, a balance sheet reports:
- Assets (What a business owns)
- Liabilities (What a business owes)
- Owner’s Equity (What a business is worth)