The Balance Sheet
A balance sheet lists what a company owns and what it owes on one day.
The idea
A balance sheet is a list of everything a company owns and everything it owes, on one exact day. The things it owns are called assets — cash, buildings, trucks, products sitting on a shelf. The things it owes are called liabilities — loans, unpaid bills, money borrowed from a bank. Subtract the liabilities from the assets and the leftover belongs to the owners; that leftover is called equity. 📋
Words to know
- Balance sheet
- A list of what a company owns and what it owes on one day.
- Asset
- Something the company owns that has value, like cash or a truck.
- Liability
- Money the company owes to someone else, like a loan or a bill.
- Equity
- What is left for the owners after you take away everything owed.
- Snapshot
- A picture of one exact moment, not a whole year.
Try it — no account needed
True or false? Swipe each card.
Cash sitting in a company's bank account is an asset.
In the full lesson
- 1True or false
- 2Work out the number
- 3Make the call
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