TERM OF THE DAY balance sheet A condensed statement that shows the financial position of an entity on a specified date (usually the last day of an accounting period). Among other itemsof information, a balance sheet states (1) what assets the entity owns, (2) how itpaid for them, (3) what it owes (its liabilities), and (4) what is the amount left after satisfying the liabilities. Balance sheet data is based on a fundamentalaccounting equation (assets = liabilities + owners' equity), and is classifiedunder subheadings such as current assets, fixed assets, current liabilities, Long-term Liabilities. With income statement and cash flow statement, it comprisesthe set of documents indispensable in running a business. An audited balance sheet is often demanded by ... Learn more about this term Usage Example Before filing taxes, the accountant must look at the company's balance sheet to ensure that all assets, liabilities, and owners' equity have been accounted for.

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