Accounting

The liabilities on the balance sheet reflect who provides capital to the company, divided into debt and equity. Debt encompasses liabilities, while equity shows the ownership claims.

The asset side of the balance sheet shows the assets of a company, divided into current assets (e.g., cash, receivables, inventories) and fixed assets (long-term assets such as office equipment). Current assets are ordered by liquidity, with cash listed first and less liquid items such as receivables listed last.

The income statement of a company juxtaposes expenses and revenues annually to determine success. It is an essential financial instrument.

A balance sheet compares assets (assets) and liabilities (liabilities) of a company. Assets are divided into current and fixed assets, liabilities into debt and equity.