The balance sheet reveals bookkeeping mistakes. Among the potential errors are incorrect inventory, overstated customer invoices, and understated vendor bills.
Balance sheets are snapshots of account balances on given dates, such as month-end or year-end. The three sections are: (1) what you own (assets), (2) what you owe (liabilities), and (3) the difference between these two—which is your business net worth (equity). Let’s have a quick review:
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