According to SAS No. 29,
the balance sheet (or
statement of financial
position) is one of the
basic financial
statements. It is a
summary of a company's
financial condition as
of a specific point in
time. Unlike the
statement of income and
statement of cash flows, which are an
accumulation of
transactions within a
given period, the
balance sheet only
considers an account's
balance as of a date
certain.
Typically a
balance sheet is
reported as of an end of
a company's accounting
period - end of month,
end of quarter and end
of year.
Balance sheets are used
by management, analysts
and potential creditors
to identify trends,
through
ratio
calculations, to get a
handle on the
financial strength and
potential weaknesses of
a business
There
are generally three
major categories of
account classification
on a balance sheet:
