Assets

• Current assets: Cash, accounts receivable, inventory, prepaid expenses
• Long-term assets: Land, buildings, equipment, investments

Liabilities

• Current liabilities: Accounts payable, short-term debt, current portion of long-term debt
• Long-term liabilities: Long-term debt, bonds, pension liabilities

Owner’s Equity

• Common stock
• Retained earnings

Total Assets = Total Liabilities and Owner’s Equity

Accounting Equation: Assets = Liabilities + Owner’s Equity

Notes:

• The balance sheet is a financial statement that summarizes a company’s assets, liabilities, and owner’s equity at a particular point in time.
• The accounting equation must always be balanced, meaning that the total assets are equal to the total liabilities and owner’s equity.
• The balance sheet is used to provide a snapshot of a company’s financial health and to track changes over time.