Article · 30 min read

Balance Sheet (Explanation)

Harold Averkamp, AccountingCoach · accountingcoach.com Free Beginner

A thorough plain-English course on the balance sheet: current and long-term assets and liabilities, equity, and how it connects to the income statement, with sample balance sheets.

  • Assets = liabilities + owner's equity, kept in balance by double-entry bookkeeping.
  • Current items are those expected to turn into cash, or be paid, within a year.
  • The balance sheet and income statement are linked through retained earnings.
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The question it answers

  1. How do I read a P&L, balance sheet, and cash flow statement?

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