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THE BALANCE SHEET (Current Assets (the firm’s receivables. (receivables…
THE BALANCE SHEET
is a summary
of a firm’s assets, liabilities, and owners’ equity accounts at a particular time, showing the various dollar amounts that enter into the accounting equation.
Assets
On a balance sheet assets are listed in order, from the most liquid to the least liquid.
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Current Assets
Current assets are cash and other assets that can be quickly
converted into cash or that will be used within one year.
Following that are marketable
securities—stocks, bonds
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Intangible Assets
assets that do not exist physically but have a
value based on legal rights or advantages that they confer on a firm.
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Owners’ Equity
For a sole proprietorship or partnership, the owners’ equity is shown as the difference between assets and liabilities.