Balance Sheet - JSS3 Business studies Lesson Note

Meaning:
A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It shows what a company owns (assets), what it owes (liabilities), and the amount invested by shareholders (equity) at that particular moment.

Content:
A balance sheet is divided into two main sections:

• Assets: These are things the company owns or controls, which have value and can be used to generate future economic benefits.
• Liabilities and Equity: These represent the company's obligations or debts and the owners' stake in the company, respectively.

Uses:

• Investors and creditors use balance sheets to assess a company's financial health and its ability to meet its obligations.
• It helps management in making decisions regarding investments, financing, and operations.
• Regulators and tax authorities use balance sheets for regulatory compliance and taxation purposes.