THE BALANCE SHEET- statement produced periodically, normally at the end of financial year showing your ASSET= LIABILITIES + CAPITAL. Assets- What the firm owns. Normally presented in its monetary amount. CURRENT ASSETS- composed of cash, bank deposits, and other item readily convertible into cash. NON CURRENT ASSET- converted into cash for more than a year like land, buildings, machinery, vehicles, furnitures and fixtures. INTANGIBLE ASSET- goodwill, patent, copyright Liability.- What the firm owes. It shows the profile of the debts of the companies. 2 KINDS: 1.) SHORT TERM LIABILITIES- usually payable within one year like purchase of raw materials. 2.) LOANS AND NOTES PAYABLE- evidenced by promissory notes and backed up by collaterals. 3.) ADVANCES FROM CUSTOMER- not yet earned income . They are considered liabilities like downpayment. 4.) ACCRUED EXPENSES- obligations that have been incurred but not yet paid like bills, 5.) MORTGAGE PAYABLE- borrowings usually covered by land, buildings, or equipment. 6.) BONDS PAYABLE- Each creditor holds the bond , or promise to pay within a specified interval of time. It is embodied in a indenture containing the terms and conditions of the bond. ( Standard and Poor/ Mergents Bond Rating) NET WORTH- It represent the interest of the owner in a company.