Important Features of the Balance Sheet 1. Assets = Liabilities + Owner’s Equity 2. 3 line heading is used that tells the reader: WHO, WHAT, WHEN 3. Assets are in order of liquidity (the order in which assets can be changed into cash). Cash is always first (or Bank), then Accounts Receivables, then Supplies, then Machines, Equipment, Land and Building. 4. The liabilities are listed in the order that they must be paid back.

5. When showing the values for land, building, or equipment, always show the full Fair Market Value, even if the assets hasn’t yet been paid for fully. The payable on that asset will be shown in the liability section. 6. The final totals (Assets, and Liabilities & Equity) are underlined with a double line.