Functions of a Balance Sheet
A balance sheet gives a summary report that managers use to verify balances on important items, such as cash, total amounts owed to a business, and total amounts of owners' equity.
Managers and investors review balance sheets to verify companies have enough money to pay their bills.
For example, this balance sheet shows $300 in cash and $2,000 in receivables (amounts owed to the business). It also shows $10,000 in current liabilities.
This situation is worrisome. How will this business pay for the liability amount? Are the leaders managing the business properly?
