Balance Sheet

The Balance Sheet is a snapshot of your business's financial position at a specific point in time. It shows what you own (assets), what you owe (liabilities), and what's left for the owners (equity).

---

The Core Equation

Assets = Liabilities + Equity

This equation always balances. If it doesn't, something has been posted incorrectly.

---

How to View the Balance Sheet

1. Go to Reports
2. Select Balance Sheet
3. Choose the as of date (snapshot date)
4. The report loads automatically

---

Report Structure

ASSETS
  Current Assets
    Cash and Bank                AED  45,000
    Accounts Receivable          AED  80,000
    Inventory                    AED  25,000
    Prepaid Expenses             AED   3,000
  ─────────────────────────────────────────
  Total Current Assets           AED 153,000

  Fixed Assets
    Equipment                    AED  50,000
  ─────────────────────────────────────────
  Total Assets                   AED 203,000

LIABILITIES
  Current Liabilities
    Accounts Payable             AED  40,000
    VAT Payable                  AED   8,000
  ─────────────────────────────────────────
  Total Liabilities              AED  48,000

EQUITY
  Owner's Capital                AED 107,000
  Retained Earnings              AED  48,000
  ─────────────────────────────────────────
  Total Equity                   AED 155,000

TOTAL LIABILITIES + EQUITY       AED 203,000

---

Key Sections Explained

Section	What It Shows
Current Assets	Assets expected to be used/converted within 12 months
Fixed Assets	Long-term assets (equipment, vehicles, property)
Current Liabilities	Debts due within 12 months (payables, short-term loans)
Long-Term Liabilities	Debts due beyond 12 months
Equity	Owner's investment + accumulated profits (Retained Earnings)

---

Frequently Asked Questions

Why doesn't my Balance Sheet balance?
This usually means a journal entry was posted incorrectly (debits ≠ credits), or a transaction was posted to the wrong account type. Check your General Ledger for unusual entries.

What's the difference between the P&L and the Balance Sheet?
The P&L covers a period (e.g. this year's income and expenses). The Balance Sheet is a point in time (what you own and owe right now). The net profit from the P&L flows into Retained Earnings on the Balance Sheet.

My Accounts Receivable seems too high — why?
This means you have unpaid invoices. Check the Accounts Receivable Aging report to see who owes what and for how long.