What is Balance Sheet?😅☝😅☝😅☝😅☝

My friend and I wanted to start a Boutique business. We have come up with many innovative ideas to commence the business. As we planned for a partnership business, we have invested 10 lacs equally. I have invested Rs.5 lacs where Rs.2,50,00 is invested on my own and remaining amount was borrowed from my uncle with an interest of 2% every month. The amount which is invested was been used for various expenses. (just think what do you need when you are opening boutique stores)
1.Renting a store: Rs.2,00,000/- in advance
2.Two sewing machines: Rs. 50,000/- (25,000 each)
3.Three Mannequins (display dolls): Rs.1,50,000/-(50,000 each)
4.Furniture and other essentials: Rs.1,25,000/- (including carpentry work and paintings)
5.Fabrics to make clothes: Rs.2,50,000/-
6. Bank deposit: Rs.1,50,000/- (a bank account in SBI)
7.Two Computers: Rs: 50,000/- (for maintaining accounts and billing information)
8. Stationary: Rs: 25,000/- (pens, pencils and decorative items)

These are all the essentials to open a store.  Well, here the physical items which we have purchased are said to be ‘ASSETS', the amount which we have invested is said to be ‘OWNERS EQUITY' or CAPITAL. The amount which I have borrowed from my uncle is ‘LIABILITY'.

"ASSETS= LIABILITY + EQUITY "is an equation which defines the "BALANCE SHEET". The amount which we have brought into the business must be equal to the amount which we have spent in the stores.


Maintaining of ASSETS, LIABILITIES, and EQUITY into physical records is said to be a balance sheet. It determines the financial position of an organization.
Isn't it easy to get to know about balance sheet in simple terms and a simple equation?
I hope you have enjoyed reading about the balance sheet and I also hope this might have helped you to some extent.
The ASSETS and LIABILITIES are classified into various categories. The classification will be explained in the next post.



Until then,
Have a great time 😊😊😊😊😊
Sneha Polapragada.