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Part: I Financial Statements and Stateme... > Balance Sheet: Current Assets

Chapter 2. Balance Sheet: Current Assets

The balance sheet complements the income statement, discussed in Chapter 1, “Working with Income Statements.” You need both to keep track of your company's financial status. It is termed a balance sheet because its two primary sections—Assets and Liabilities—must be in balance; that is, the total of the company's assets must equal the total of its liabilities and its equity.

The balance sheet summarizes a company's financial position at the end of a given period. Whether that period is a month, a quarter, or a year, it tells you the value of the company's assets. It also describes the various classifications of liabilities, such as Accounts Payable, Debt, and Equity, that have claims against the company's assets.


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