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How the Balance Sheet Works

The balance sheet is divided into two parts that, based on the following equation, must equal each other, or balance each other out. The main formula behind balance sheets is:

Assets = Liabilities + Shareholders' Equity
Assets, liabilities and owner s equity
Assets are what a company uses to operate its business,
liabilities and equity are two sources that support these assets.
Owners' equity, referred to as shareholders' equity i ....etc

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