What is a balance sheet and what do I use it for?

A balance sheet is snapshot of your finances at a very specific time. This financial statement is composed of the assets, liabilities, and equity of a business at the end of an accounting period.

The purpose of the balance sheet is to reveal the financial status of a business as of a specific point in time. As mentioned above, the balance sheet shows what an entity owns (assets) and how much it owes (liabilities), as well as the amount invested in the business (equity).