Balance sheet
In Arabic الميزانية العمومية
A statement of what a business owns, what it owes and what belongs to its owners on one day, in which assets always equal liabilities plus equity.
In plain words
Where the income statement covers a period, the balance sheet is a snapshot. It shows how much stock, cash and receivables the business holds, and how much of that is funded by vendors, lenders and owners.
Assets are set against liabilities and equity. Until the year is closed, the profit earned so far has not moved into retained earnings, so it is shown inside equity as current period earnings, which keeps the two sides equal.
The common mistake is leaving current earnings out mid-year. The sheet then fails to balance by exactly the year’s profit so far, and people go hunting for an error that is not there.
- Total assets
- SAR 820,000
- Total liabilities
- SAR 310,000
- Equity
- SAR 450,000
- Current period earnings
- SAR 60,000
- Liabilities and equity
- SAR 820,000
In Axon Suite
How Axon Suite handles it
Axon Suite reads the balance sheet as at any day from the posted ledger and tells you whether it balances. The period’s earnings are shown inside equity, so it balances before the year is closed.
Feature
Trial balance, P&L and balance sheet
The trial balance, income statement and balance sheet read straight from the posted ledger. Each parent account totals the accounts beneath it, and the balance sheet tells you whether it balances.
Open: Trial balance, P&L and balance sheet