Reminder : the Balance Sheet Essentials

Excel for Finance – Balance Sheet Essentials

The Accounting Equation: Assets = Liabilities + Owner’s Equity

  • Current Assets
  • Long-Term Assets
  • Current Liabilities
  • Long-Term Liabilities
  • Owner’s Equity

Current Assets

The term current in a balance sheet generally means “short-term” which is usually one year or less. Common current assets includes cash, accounts receivable, inventory, and prepaid expenses.

Long-Term Assets

These assets include long-term investments, cost of property and equipment offset by accumulated depreciation, intangible assets, and other assets.

Current Liabilities

These include the obligations to be paid within one year, including accounts payable, short-term loans, income taxes payable, wages, unearned revenue, and the current portion of long-term debt.

Long-Term Liabilities

These include long-term debt, capital lease obligations, and deferred income tax.

Owner’s Equity (or Stockholders’ Equity for corporations)

This is basically the amount left over when you subtract Total Liabilities from Total Assets. In includes the owner’s investment(s) and retained earnings. For corporations, there are usually more categories.

Balance Sheet References