Learn in the textbookThe Big Picture of Financial Statements
DefinitionThe balance sheet (貸借対照表) is a financial statement that sets what a company owns at a specific moment, such as its fiscal year-end, beside where the money for it came from, showing its financial position.
ExplanationThe left side is called the debit side and the right side the credit side; assets go on the debit side, and liabilities and net assets on the credit side. The two totals always match, which can be written as assets = liabilities + net assets. Listed companies disclose this statement, along with the income statement, the cash flow statement and others, in the annual securities report they publish for investors.
AnalogyIt is like a snapshot of a household's finances taken at one moment at the end of the month. Savings, the car, and the loan still left to repay all appear in the same picture.
Memory hookThe Japanese name 貸借対照表 literally describes a table that sets the debit and credit sides face to face for comparison.