Balance Sheet
The balance sheet must be produced at the end of each fiscal year; this is a statement of the financial value of the business. Because it is produced at the end of the fiscal year this is regarded as just a snapshot of the company’s financial situation. It should be understood that the balance sheet is the only financial statement that relates to a moment in time. The balance sheet has two parts, firstly showing the assets or debits which are the company’s money, investments and the claim for payments owed to the creditors. Because the balance sheet does not show what the assets were initially bought for but what they are valued at now these assets can be misleading. The balance sheet shows what they are valued at now, whether this includes a write up or down. The second part shows the liabilities or credits which is everything that you owe to others. The basis of all balance sheets is double entry book keeping.