Answer :
The balance sheet is a document that lists all of the assets, liabilities, and equity of a business at a specific point in time. Lenders, investors, and creditors frequently use it to gauge a company's liquidity.
One of the documents that make up a company's financial statements is the balance sheet.
Components of a Balance Sheet :
A balance sheet will have different line items depending on the type of firm and the industry. Since many businesses in a given industry deal with the same kinds of transactions, the line items utilized for their balance sheets will often be comparable.
The line items are listed in the order of liquidity, which means that the liabilities with the earliest due dates are listed first and the assets with the greatest ease of conversion into cash are listed first. Most balance sheets will typically include the following line items:
Assets : Assets are typically divided into current assets and long-term assets; current assets are those anticipated to be liquidated within a year of the balance sheet date.
Liabilities :Liabilities are usually segregated into current liabilities and long-term liabilities, where current liabilities include anything expected to be settled within one year of the balance sheet date.
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