What Is a Balance Sheet?
A balance sheet is a financial statement that reports a one’s assets, liabilities and net worth at a specific point in time.
The Components of a Balance Sheet
A balance sheet comprises assets, liabilities and net worth. Assets are resources with economic value that an individual, corporation, or country owns or controls with the expectation that they will provide a future benefit. Liability is a debt owed that requires you to give up an economic benefit (cash, assets, etc.) to settle past transactions or events. They are obligations that must be paid under certain conditions and time frames. Your net worth is the difference between what you own and what you owe.
Once you have all of your documents (i.e assets and liabilities), list out your assets and liabilities in two columns, side by side. Include the value of each item so you can add up the totals at the end.
All the values should be from the same time period so that the sheet reflects the same, single point in time for your finances.
Now, add up each column and subtract your total liabilities from your total assets. This will give you your net worth.
Below is an example of what a balance sheet should look like
