Balance Sheet Glossary Balance Sheet A financial statement that

Balance Sheet Glossary
Balance Sheet
A financial statement that describes a person’s financial position at a given point of
The items you own, whether it was purchased for cash or financed with debt
Debts that you owe Ex. credit card charges, loans, and mortgages
Net Worth
An individual’s or family’s actual wealth
Net worth = total assets - total liabilities
Liquid Assets
Low-risk financial assets held in the form of cash or instruments that can be readily
converted to cash with little or no loss in value
An asset’s nearness to cash
Assets acquired to earn a return rather than provide a service
Ex. bond, stocks, mutual funds, and real estate
Real Property
Tangible, immovable assets Ex. land and anything fixed to it, such as a house
Personal Property
Tangible, movable assets that are used in everyday life Ex. a car, furniture
Fair Market Value
The actual value of an asset, the price that it can reasonably be expected to sell in
the open market
Current Liability
Debt due within 1 year of the date of the balance sheet
Long-term liability
Any debt due 1 year or more from the date of the balance sheet
Open account credit
Type of obligation that represents the balance outstanding against established credit
The actual ownership interest in a specific asset or group of assets
The financial state in which net worth is less than zero