How is a balance sheet adjusted so that both sides 'balance'
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What part of the balance sheet is adjusted to make sure that the right and left sides perfectly balance, and what does this component represent?
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Solution Summary
The solution the balancing process together with two examples to easier understanding.
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Remember the formula: Assets = Liabilities + Equity.
Since we don't change assets or liabilities to force a balance, equity is the place where the change will occur. It will come from the income statement which becomes part of equity at year end.
Remember the closing entries ...
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