Balance Sheet Basics – For Unisa Students

What is a Balance Sheet? 

A balance sheet is a snap-shot of the financial health of a business at a particular point in time. It is like a report card. 

Why is the Balance Sheet Important? 

The balance sheet allows the owners of the company to judge the performance of the company. If necessary they can then take corrective action. 

Why is it called a Balance Sheet? 

It is called a Balance sheet as the assets of the business must always balance with or equal the liabilities. “This is because the liabilities show who has provided the company’s funds, while the assets show how these funds have been used within the business.” (How to Read Financial Statements. Juta & Co. Becker) 

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