The composition of the balance sheet

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The balance sheet is divided into two distinct parts:

The asset
This section groups together all the assets and receivables that the company owns. There are generally several categories:

Fixed assets : These are durable goods, such as equipment, machinery, buildings or land. These assets are essential to the operation of the business and have a lifespan of more than one year;
Inventories : These are the goods, finished products or raw materials that chinese student data the company holds with a view to selling them or using them in its production;
Accounts receivable : These are the amounts owed to the company by its customers. In other words, these are sales already made but not yet settled.
The passive
This section summarizes the resources mobilized by the company to finance its assets. It includes:

Equity : This refers to the financial resources contributed by the owners or shareholders of a company. It includes share capital and retained earnings;
Accounts payable : These are the amounts owed to suppliers for purchases made on credit;
Loans : these are amounts borrowed by the company, in the short or long term. These financial resources are essential to support growth.
The balance between assets and liabilities is fundamental. It demonstrates that each resource mobilized by the company has a counterpart, thus reinforcing the transparency and reliability of the financial statements.

An entrepreneur who takes stock alone

The steps to take stockStep 1. Take inventory
Start by making a complete list of your resources and obligations. Whether it is your inventory of goods, your current services or your raw materials, record each item carefully. This inventory is crucial for clear and precise accounting.

Step 2. Calculation and recording of depreciation
Your business assets, such as premises or various equipment, lose value over time. By calculating depreciation , you adjust their real value, which allows you to maintain a true picture of your assets in the long term.

Step 3. Attachment of expenses and income to the financial year
For your balance sheet to be accurate, it is essential to link each expense and income to the corresponding period. By identifying accrued expenses and accrued income , you ensure that your finances accurately reflect the reality of your financial year.

Step 4. Recording of provisions
Anticipate future expenses by setting aside provisions, whether for uncertain debt, potential litigation or any other risk. These provisions will strengthen the strength of your balance sheet.