What is a balance sheet?
Definition of a balance sheet
A balance sheet is a report that shows how much a business owns, and owes, as at a given point in time.
The total will be equal to the sum of the business's capital accounts, because if the business sold all its assets and paid all its debts, that would be the amount left for the business owners to keep.
If the total of the balance sheet is a negative number, the business owes more than it has the resources to pay, in other words it is 'insolvent'.
How to keep track of your assets
FreeAgent is powerful double-entry bookkeeping software which can generate reports including Profit & Loss, Balance Sheet, Trial Balance, Capital Assets, Aged Debtors and Creditors whenever you or your accountant need to take a look.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.