Elements of a Balance Sheet

1
Elements of a Balance Sheet
IN

• Assets
• Liabilities
• Owners Equity

OUT
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2
Elements of a Balance Sheet
IN
Assets Assets are all those things a company
owns which are of value to the business. Assets
like cash or goods for sale that can be easily
converted into cash are called current assets
while other assets like properties and equipment
are called fixed assets.
3
Elements of a Balance Sheet

• Liabilities
• Liabilities are all those things for which the
  company eventually needs to pay.
• Current Liabilities need to be paid within one
  accounting year. Examples are Outstanding rent,
  goods bought on credit.
• Long Term Liabilities are those liabilities
  which will not be paid during the current
  accounting year. Examples are Long term debts,
  bank loans.

OUT
4
Elements of a Balance Sheet

• Owners Equity
• Owners Equity is by definition the difference
  between the Assets of a company and its
  Liabilities.
• Owners Equity is the sum of two parts
• Contributed Capital is the money that the owners
  invested in the company.
• Retained Earnings are those earnings which were
  not distributed to the owners. These can
  accumulate to a large sum over the years.

5
Elements of a Balance Sheet
A Balance Sheet must balance the assets,
liabilities and owners equity. Assets
Liabilities Owners Equity Assets Liabilities
Owners Equity
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