To create a balance sheet, you must first know a single formula: Assets = Liabilities + Net Worth. At its simplest, the balance sheet must contain two columns. On the left are assets like cash and property, on the right are liabilities like rents, loans, and other expenditures. Net worth is under liabilities and equals the amount of assets minus liabilities. The total of the first column must
. always equal the second column. If there is a disparity, there is an error somewhere in the recording.
