Basics of Accounting Part 3: Balance Sheets

In the third part of the four-part series, Fred covers how to read the Balance Sheet report. This, along with the P&L report, both generated from your accounting software such as Quickbooks, give you a picture of the health of the  company. The Balance Sheet reports on the company's assets and liabilities. As Fred points out, if those numbers are very close, you are a bit shakey. The idea would be for the assets to pull ahead of the liabilities. The article looks at the categories that show up in both of those, including accrued liabilities, things which you know will have to pay in the future.