11. The Balance Sheet

The Balance Sheet is one of the 3 main financial statements for companies, and it captures the assets, the equity and the debt at a certain point in time - like the end of the year. And it balances.

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[afroshaolin]

So are liabilities and debts used interchangeably? From what I've been taught in Accounting 1 and 2, Liabilities is usually the general title of accounts when you include debts AND obligations of accounts on a balance statement. I think we're still on the same page though, because nonetheless debts and assets do balance out (or are at least suppose to when done correctly). Great explanation tho.:)

[savingandinvesting]

Total Liabilities and Debt are used interchangeably. This is illustrated also for example when Debt/Equity ratio is calculated (Total Liabilities/Equity). We are on same page as Total Liabilities is arguably a more formal all-encompassing term, but not as conceptually clear and powerful. In the end Total Liabilities (Debt) and Equity = Assets as you say, although there are a lot of acounting terms in the detail afterwards as well. Thanks for question and interest.

[randomDudeDeux]

You'll always be 5 - stars in my heart. Great video, plan to watch the rest.

[savingandinvesting]

Thank you very much for the comment!

[YT0YT0]

It is quite complicated to understand the meaning of the key words, e.g. Stock. However, this vid has really helped me due to you have defined it in the most simplest of words, Thanks again.

[edris88]

Many thanks

[smokenfly514]

Im surprised at how much everyone loves this guy.. he must be pretty damn good in finance, business and/or accounting, but what he's explaining is the basics of the basics.. 2 minutes are frankly not enough to cover such a broad aspect of financial accounting. A good resume nonetheless

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[dcproductionsTV]

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[rvalverde86]

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[praneix2]

(read comment below and then read this)

so the 9 months subscription that's pending will feature as goods receivable or accounts receivable (should the magazine ppl give u a refund for whatever reason for the 9 month period) while the portion of the money u spent on the 3 months subscription that you hv enjoyed will feature as an expense incurred. For corporates, replace the magazine subscription with annual maintenance contracts, one-time annual insurance premiums or professional memberships.

[praneix2]

this is how i understand adjustments. in personal context, let us say u subscribe to a monthly magazine on Jan1st for the whole calendar yr. But by 31st march, you'd hv received only 3 copies. But if you have to file your tax returns and if this could be accounted for as expenses (say u r self employed to be eligible for this), ur income and expenses statement would say you have spent on 3 months subscription as yet and hv prepaid for the next 9 months. this is called adjustment of accounts.

[cyasla]

Could you please explain adjustments within budgets? i really need some help in that....