What is Balance Sheet?

Legal Definition
In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of an individual or organisation, whether it be a sole proprietorship, a business partnership, a corporation, Private limited company or other organization such as Government or not-for-profit entity. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.

A standard company balance sheet has three parts: assets, liabilities, and ownership equity. The main categories of assets are usually listed first, and typically in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities.

Another way to look at the balance sheet equation is that total assets equals liabilities plus owner's equity. Looking at the equation in this way shows how assets were financed: either by borrowing money (liability) or by using the owner's money (owner's or shareholders' equity). Balance sheets are usually presented with assets in one section and liabilities and net worth in the other section with the two sections "balancing".

A business operating entirely in cash can measure its profits by withdrawing the entire bank balance at the end of the period, plus any cash in hand. However, many businesses are not paid immediately; they build up inventories of goods and they acquire buildings and equipment. In other words: businesses have assets and so they cannot, even if they want to, immediately turn these into cash at the end of each period. Often, these businesses owe money to suppliers and to tax authorities, and the proprietors do not withdraw all their original capital and profits at the end of each period. In other words, businesses also have liabilities.
-- Wikipedia
Legal Definition
A financial statement that consists of a three-part summary of a company's assets, liabilities, and ownership equity at a particular instance in time. It is intended to show the financial condition of a company at that time.

The balance sheet states the assets on one side and the liabilities and equity, together, on the other side. Both sides must balance out with each other.
Legal Definition
A statement made by merchants and others to show the true state of a particular business. A balance sheet should exhibit all the balances of debits and credits, also the value of merchandize, and the result of the whole. Vide Bilan.
-- Bouviers Law Dictionary
Legal Definition
When it is desired to ascertain the exact state of a merchant's business, or other commercial enterprise, at a given time, nil the ledger accounts are closed up to date and balances struck ; and these balances, when exhibited together on a single page, and so grouped and arranged as to close into each other and be summed up in one general result, constitute the "balance-sheet." Eyre v.' Harmon, 92 Cal. 580, 28 Pac. 779.
-- Black's Law Dictionary
Legal Definition
A statement showing the financial condition of a business. See 92 Cal. 580, 28 Pac. 779.
-- Ballentine's Law Dictionary