Balance sheet – Definition & Meaning

A balance sheet is a financial statement that provides a snapshot of a company’s financial position at a specific point in time. It summarizes a company’s assets, liabilities, and equity. A balance sheet is an important tool for investors, creditors, and other stakeholders to evaluate a company’s financial health and make informed decisions.


A balance sheet is a financial statement that reports a company’s assets, liabilities, and equity at a specific point in time. It presents a company’s financial position by showing what it owns (assets), what it owes (liabilities), and what is left over for the owners (equity).


The balance sheet has its roots in the accounting practices of medieval Europe. In the 15th century, Italian merchants used a system of double-entry bookkeeping to keep track of their financial transactions. This system eventually evolved into the modern balance sheet, which is now a standard tool for financial reporting.

Meaning in different dictionaries

According to the Merriam-Webster dictionary, a balance sheet is “a statement of financial condition at a given date showing assets, liabilities, and capital.” The Oxford English Dictionary defines a balance sheet as “a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time.”


A balance sheet is closely associated with other financial statements, such as the income statement and cash flow statement. Together, these statements provide a comprehensive view of a company’s financial performance and position.


Synonyms for balance sheet include financial statement, statement of financial position, and statement of financial condition.


There are no direct antonyms for balance sheet, but it could be contrasted with other financial statements that focus on different aspects of a company’s financial performance, such as the income statement or cash flow statement.

The same root words

The root words of balance sheet are “balance” and “sheet.” Balance refers to the idea of maintaining equilibrium or stability, while sheet refers to a document or record.

Example Sentences

  1. The balance sheet showed that the company had more assets than liabilities.
  2. Investors often look at a company’s balance sheet to assess its financial health.
  3. The accountant prepared a balance sheet for the small business owner.
  4. The balance sheet revealed that the company had a large amount of debt.
  5. The CEO was pleased to see that the balance sheet showed an increase in equity.
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