Balance Sheet 2025

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The balance sheet is split into three sections: assets, liabilities, and owners equity. A balance sheet must balance out where assets = liabilities + owners equity. Assets and liabilities are split into long-term and short-term.
Owning vs Performing: A balance sheet reports what a company owns at a specific date. An income statement reports how a company performed during a specific period. Whats Reported: A balance sheet reports assets, liabilities and equity. An income statement reports revenue and expenses.
The Balance Sheet is a statement of assets, liabilities and capital, whereas the Profit and Loss account is a statement of income and expenses. The Balance Sheet is static; it doesnt necessarily change from period to period, whereas the Profit and Loss account will always change with each new accounting period.
The balance sheet displays the companys total assets and how the assets are financed, either through either debt or equity. It can also be referred to as a statement of net worth or a statement of financial position. The balance sheet is based on the fundamental equation: Assets = Liabilities + Equity.
However, the Net income on the Balance sheet absolutely should match the Net income on the PL when the PL is run on the same date range, such as ``This Fiscal Year to date - or any date range that starts at the beginning of the Fiscal Year and ends on the Balance Sheet date. Always. Exactly.
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The order goes like this: The profit and loss statement: All income and expenses are added together to gather the net income, which youll report as retained earnings. The balance sheet: That net income becomes a retained earnings line item on the balance sheet, which is used to locate the ending cash balance.
Is the Balance Sheet the Same as a PL? The balance sheet reports the assets, liabilities, and shareholders equity at a point in time. The profit and loss statement reports how a company made or lost money over a period. So, they are not the same report.
Key components of a balance sheet include current assets, long-term assets, current liabilities, long-term liabilities, and shareholders equity, each crucial for understanding financial health.

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