Balance sheet
or Statement of financial position

Moving on from our previous illustrations, here is a sample balance sheet for Carter Printing Services, a service type sole proprietorship business.

All amounts are assumed and simplified for illustration purposes.

Explanation and Pointers

1. A Balance Sheet shows the financial position or condition of the company; thus, it is also called "Statement of Financial Position".
2. A typical balance sheet starts with a heading which consists of three lines. The first line presents the name of the company; the second describes the title of the report; and the third states the date of the report.
3. Notice that the third line is worded "As of. " Unlike the other components of the financial statements which cover a span of time ("For the period ended.."), the balance sheet presents information as of a certain date (at a specific point in time). In the above example, the contents of the balance sheet pertain to the financial condition of the company on December 31, 2021.

Financial position refers to how much resources are owned and controlled by a company (assets), and the claims against them (liabilities and capital). Assets, liabilities and capital balances are reported in a balance sheet, which is also known as statement of financial position.