In Accounting, An Itemized Statement

Of What One Owns, What One Owes,

and What One Is Worth Is Called A:
The First Step In Setting Up Records Is
To Find Out:

1. What One Owns

2. What One Owes
3. What One Is Worth
Balance Sheet Reports What A Business
Owns-Assets

Owes-Liabilities

Worth-Owner’s Equity
(Name of Business) Navarro’s Car Wash

(Name of Form) Balance Sheet

(Date) June 30, 2007

Navarro’s Car Wash

Balance Sheet
June 30, 2007
Navarro’s Car Wash
Balance Sheet
June 30, 2006
Three Sections of a Balance Sheet

• Assets

• Liabilities

• Owner’s Equity
Assets-(lst Section)

• Things You Own

• Examples:
Supplies
Cash
Equipment
 Navarro’s Car Wash
Balance Sheet
June 30, 2006
Assets
Cash On Hand
Equipment
Supplies
Total Assets
Things A Business Owes
-Accounts Payable-Sears, Inc.
-Accounts Payable-IBM Company
 Navarro’s Car Wash
Balance Sheet
June 30, 2006
Assets
Cash
Equipment
Supplies
Total Assets
Liabilities
Accounts Pay.-IBM
Accounts Pay./Sears, Inc.
Total Liabilities
What A Business Is Worth
-Jose L. Navarro, Capital
-Jose L. Navarro, Withdrawals
The Worth Of A Business
-Joe Navarro, Capital
-Joe Navarro, Withdrawals
 Navarro’s Car Wash
Balance Sheet
June 30, 2006
Assets

Cash

Equipment

Supplies

Total Assets

Liabilities

Dell Computers

Accounts Pay./TG Supplies

Total Liabilities

Owner’s Equity

JL Navarro, Capital
Jon Clark, For Example, Owns The Following:

Cash On Hand $ 5,500

Equipment 25,000
Supplies 2,000
Office Equipment 5,000
Office Supplies 1,000
Total Amount Owned $38,500
Jon Clark Owes The Following:

Owed To TG Supply 1,000

Owed To Max
Furniture 400
Total Amount Owed $ 1,400
 The Accounting Equation

Assets = Liabilities + Owner’s Equity

$38,500 = $1,400 + $37,100
Here Is The Process:

Jon Clark Owns $38,500

Jon Clark Owes 1,400
Jon Clark Is Worth $37,100
By Subtracting What Jon Clark Owes
($1,400) From What He Owns
($38,500) We Find What He Is Worth.
 Summary

Balance Sheet Reports:

• What A Business Owns-Assets

• What A Business Owes-Liabilities
• What A Business is Worth-Owner’s Equity