Spring Cleaning the Balance Sheet

There are two main financial statements:

1. The P&L also known as the Profit & Loss Statement or Income statement showing what money has come in and what money has gone out of a business, a household or other entity.  The statement covers a period of time such a day, week, month, quarter, or year.

2. The Balance Sheet showing what you own (Assets such as cash, cars & homes), who you owe (Liabilities such as loans, credit cards, mortgages) and the difference is know as Equity (either positive or negative).  The statement is as of a particular date such as December 31st.