The general balance sheet is a report prepared by a specialist in accounting or administration, where the different accounts that make up the assets, liabilities and capital of an organization are detailed in a given time, its purpose is to inform senior management what the situation is financial company to a specific date. The accounts that are reflected in the group of assets represent all the assets and rights that an organization has. For example cash, property, furniture, accounts receivable, etc. The accounts that are reflected in the group of liabilities, represent all the debts or obligations that the company contracts with third parties.
For example. Mortgages payable, accounts payable, rents payable, etc. And finally there is the equity or capital, which represents what the company really has left after deducting all the debts from the assets, that is, it will reflect what a company truly owns. The equity equation links these three groups:
Equity or capital = Assets-Liabilities
The preparation of a balance sheet is in charge of the accounting and finance department of the company, generally, said report is made annually, when the closing of the financial year of the company is made, however there may be the possibility of preparing it at moment of the opening of the company, or also monthly. When making important decisions for the company, management must have this report, which will provide accurate information on how the company is operating economically.
