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What is a bookkeeping balance sheet?

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Quick Answer

A balance sheet in bookkeeping is a financial document displaying the company's assets, liabilities and equities at a certain point in time, such as at the end of a month or year, states AccountingTools. The balance sheet is important because it can show whether a company owns more than it owes and thus gives an idea of its financial standing at the document's stated date.

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Full Answer

The balance sheet lists assets first. These are things the company owns like investments, equipment, intangible items and cash. Liabilities and stockholders' equity are generally grouped together in a separate section. Liabilities include both short-term and long-term debts while stockholders' equity includes the paid-in capital, company's stock and retained earnings, notes Accounting Coach. In the end, the company's assets will be equal to its total liabilities and stockholders' equity.

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