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  • Short-term investments — Also called temporary investments or marketable securities, these include interest- or dividend yielding holdings expected to be converted into cash within a year. List stocks and bonds, certificates of deposit and time-deposit savings accounts at either their costs or market value, whichever is less.
  • Prepaid expenses — Goods, benefits or services a business buys or rents in advance. Examples are office supplies, insurance protection and floor space.
  • Long-term Investments — Also called long-term assets, are holdings the business intends to keep for at least a year and that yield interest or dividends. Included are stocks, bonds and savings accounts earmarked for special purposes.

Fixed Assets
Includes all resources a business owns or acquires for use in operations and not for resale. Fixed assets may be leased. Depending on the leasing arrangements, both value and liability of the leased property may need to be on the balance sheet.

  • Land — List original purchase price without allowances for market value.
  • Buildings
  • Improvements (Including leasehold improvements)
  • Equipment
  • Furniture
  • Automobile/vehicles


Current Liabilities
List all debts and obligations payable within 12 months. Typically they include:

  • Accounts payable — Amounts owed to suppliers for goods and services purchased in connection with business operations.
  • Notes payable — The balance of principal due to pay off short-term debt for borrowed funds. Also includes, the current amount due of total balance on notes whose terms exceed 12 months.
  • Interest payable — Any accrued fees due for use of both short-and long-term borrowed capital and credit extended to the business.
  • Taxes payable — Amounts estimated by an accountant to have been incurred during the accounting period.
  • Payroll accrual — Salaries and wages currently owed.

Long-term Liabilities
Notes payable — List notes, contract payments or mortgage payments due over a period exceeding 12 months or one cycle of operation. They are listed by outstanding balance less the current position due.

Net Worth
Also called owner’s equity, net worth is the claim of the owner(s) on the assets of the business. In a proprietorship or partnership, equity is each owner’s original investment plus any earnings after withdrawals. In a corporation it is the capital investment paid for the issuance of stock, plus the surplus paid in by the principals, and the after tax retained earnings.

Total Liabilities and Net Worth
The sum of these two amounts must always match that for total assets.

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