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Balance Sheets A balance sheet is a statement of a firm's assets, liabilities and owners' equity at a specific date (i.e. it is a "snapshot" of the financial strength of a business at a particular moment in time). It summarises the financial state of the business at that date. When added together, the liabilities and owners' equity represent the sources of capital (i.e. it tells us where the money came from) and the assets represent the uses of the capital (i.e. it tells us how the money was spent). The two sides of the account must always balance, since every penny raised as capital must have been used for some purpose and must be accounted for. Assets An asset is an item that will give present or future monetary benefits to a business as a result of economic events. Therefore, an asset is basically an item or money that the business owns. There...

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