Financial statements
Balance sheet
A balance sheet reports assets, liabilities, and equity at a specific date.
Reviewed by the Booksmrt bookkeeping teamLast reviewed 2026-07-27
How it works in the books
Unlike an income statement, which covers a period, the balance sheet is a snapshot. It includes cash, receivables, equipment, debts, payables, and owner equity.
Example
A June 30 balance sheet can show $50,000 of assets, $20,000 of liabilities, and $30,000 of equity.
What can go wrong
A balance sheet can balance mathematically while containing stale receivables, duplicate liabilities, or unsupported opening balances.
Compare Balance sheet
Balance sheet vs. income statementThe balance sheet answers what the business owns, owes, and has accumulated at one date. The income statement answers how much the business earned or lost over a span of time. The statements are connected through equity and net income.Trial balance vs. balance sheetThe trial balance is an internal accounting checkpoint containing balance-sheet and income-statement accounts. The balance sheet is a financial statement focused only on assets, liabilities, and equity at a date.
Sources
Educational information only. Booksmrt provides bookkeeping services, not tax, legal, audit, or investment advice. Confirm material accounting and tax decisions with the appropriate professional.