Financial Reports - understanding the Balance Sheet

The Balance Sheet is the accounting report that reflects the economic and financial situation of a company at a given time. That is, it's a “still photo” of the situation of the company, which allows us to analyse the state of the company and make decisions accordingly. It is also possible that the balance is generated by comparing it with the same date of the previous year, in order to recognize possible changes in the company’s behaviour. The balance sheet is structured in two blocks; Assets and Liabilities . Does your balance sheet balance? The fundamental principle of the balance sheet is that the assets, liabilities and equity must balance , that is, the balance sheet must balance. If not, you must review the accounting, as it is certain that we will have been a misposting. There is another possibility by which a balance may not balance. When we perform accounting in a computer program, this usually allows us to create ac...