What Are the Requirements of Balance Sheet

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The requirements of a balance sheet are to follow a formula that illustrates the assets equaling the liabilities and the owner's equity. Outline the assets, liabilities and equity to create a thorough balance sheet with information from an accounting professor in this free video on business.

Part of the Video Series: Balance Sheets
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Video Transcript

Hi, my name is Shawn Jones, adjunct professor at Argosy University. Today, we're going to discuss the requirements of a balance sheet. The requirements of a balance sheet is simply put by the formula "assets must equal liability plus owner's equity." The balance sheet basically records those three aspects or areas of a company in a given snapshot or a given date in time. For example, on December 31st of a given year, the cash which my company held on that date was X amount. The amount of liabilities or bills that my company had to give is also a given amount. And on that same date, the amount of money that the owners of our company had invested in the company was this or the amount of dividends we have paid them was an X or a certain amount. For more information about this topic, please visit our website at argosy.edu. There you can find our phone number or an address to come and visit our Salt Lake City campus.

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