ABSTRACT
A balance sheet is a concise statement compiled from the books of a concern which have been kept by double entry, showing on the one side all the assets and on the other side all the liabilities of the concern at a particular moment of time. In the case of a company, as for example one registered under the Companies Act of 1862, where the capital is fixed, the surplus of assets over liabilities may consist of the capital, of a reserve created for the benefit of the shareholders and the stability of the company, and of the unappropriated or undivided profit. If the liabilities exceed the assets the balance sheet shows a deficiency, and the amount of the deficiency is the measure of the insolvency of the concern, or the indebtedness of the owners to the business for losses incurred.
