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What is the purpose of creating a balance sheet?

The purpose of the balance sheet is to provide an idea of a company’s financial position. It does so by outlining the total assets that a company owns and any amounts that it owes to lenders or banks, for example, as well as the amount of equity.

What is the format of a balance sheet?

A balance sheet has two formats: account form and report form. An account form balance sheet is just like a T-account listing assets on the debit side and equity and liabilities on the right hand side.

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