Balance sheet
In accounting, balance sheet means assets, liabilities and equity at a point in time, proving the accounting equation.
- Layer
- Lexicon
- Defined in
- Lexicon
- Components
- 4
Authority
This definition follows ASC 210.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
The lessons that teach this
Accounting, 0 to 1 — a free course taught end to end on one month of one company, with the spreadsheet exercises to work it yourself.
- 02The accounting equationAssets = liabilities + equity is not a formula you apply at period end. It is true after every single entry, and that is what makes the books provable.7 min
- 11The balance sheetThe other three account types, at one instant — and the single line where the month's profit lands, which is what ties the two statements together.10 min
Balance sheet, in use
Quoted from the 13 documents that use the word — what it does to an interface, in the spec's own sentence.
Opening cash + Net change in cash = Closing cash, and closing cash, cash equivalents and restricted cash equal the balance sheet lines that hold them.
Statement semantics — 1. The three statements, and how they connect
Every balance sheet account needs a schedule behind it, and the schedule must tie.
It's a liability, and the balance sheet is unambiguous about that.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- Balance sheetWhat the company owns and owes on a single date. Assets equal liabilities plus equity, always.
- Balance sheet explained for startupsAssets equal liabilities plus equity. What each startup line means, from deferred revenue to the SAFE and the accumulated deficit, and why it must balance.
- Audit-ready books before your Series AInvestors, lenders and auditors ask for the same things: accrual statements, reconciled accounts and support for every balance. How to be ready first.
- Form 1120: what to give your tax preparer, and whenWhat a startup hands its tax preparer for Form 1120: closed books, a balance sheet that ties to Schedule L, book-to-tax items, ownership and 1099s.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- statement of position in US copy (IFRS: statement of financial position)
Components that render this
The concept is not documentation-only. These are the components that name it in their specification, grouped and stated exactly as the catalog states them.
9Accounting core (GL)
Family specTerms this one depends on
Also in Statements
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- ReportsShould you build statements on the reports endpoints?API
- Trial balance vs balance sheetA trial balance lists every account's balance to prove debits equal credits; a balance sheet presents only assets, liabilities and equity, grouped and ordered for a reader, as of one date.Compare
- Balance sheet vs income statementThe balance sheet shows what a company owns and owes at one moment; the income statement shows what it earned and spent over a period — one is a snapshot, the other a film.Compare
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.