Balance Sheet

In the beginning, is the Balance Sheet, XE "balance sheet" XE "statement of financial position" which the Financial Accounting Standards Board (FASB) has renamed the Statement of Financial Position. All of the assets controlled by the company are added up, then all of the liabilities are added, and the sum subtracted from the assets. The “owners” own whatever part of the assets cannot be claimed by others; their share is called equity. The accounting having been done correctly, the sum of all the assets minus the sum of all the liabilities equals equity.

The balance sheet is a flash picture. It shows the company’s financial position at one point in time. QuickBooks? basically generates a balance sheet by summarizing all of the transactions in each balance sheet account since time began (January 1, 1928,) up through the date of the report.

NOTE

The Balance Sheet is the only report which will summarize transactions which are transfers, with balance sheet accounts on each end. Details of transfers can be displayed in Transaction Reports (below.)

The view shown is the printed report. The display has options similar to the Profit and Loss Report, below. The date prepared is optional, but if shown, is the computer system date.

icon note

The traditional balance sheet requires closing of the books. Special transactions are recorded, moving the balance of each income and expense report into retained earnings. QuickBooks? has a small variation on this. In effect, the books are closed instantly by running a balance sheet. But the traditional closing transactions are not created. When the report is generated, all income and expense transactions are summarized in two earnings accounts, which appear as the last two accounts on the balance sheet. Retained Earnings contains income and expense results for all recorded time prior to the current fiscal year. Net Income shows the bottom line of the Profit and Loss Report for the current fiscal year. Both of these accounts have dedicated functions, which cannot be changed.

[do not use screen capture report illustration. use paper artwork.]