What is a balance sheet?

A balance sheet is a financial statement that shows what a business owns, what it owes, and the owners' equity at a specific point in time. It reflects the accounting equation: Assets = Liabilities + Equity and provides a snapshot of a company's financial position.

Example: A balance sheet may show $500,000 in assets, $200,000 in liabilities, and $300,000 in equity as of December 31.

Related terms: Assets, Liabilities, Equity, Financial Statements