The Purpose and Use of the Balance SheetThe Balance Sheet allows us to momentarily halt the flow of revenues and expenses reported on the income statement, and to summarize the company's resources and claims to those resources at a certain point in time (e.g. March 31, 2008). It balances the assets on one side with interests or claims to those interests on the other. A claim to an asset can be either a debt, called a liability, or what is owned by the business called owner's equity. Owner's equity is the sum of what the owner has invested in the business, and the profits (or losses) accumulated from business operations.
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