Statement of Financial Position

AKA

balance sheet

objective

show the resources available to a corporate's management and how such resources are funded, as can be seen below:

Relationships of statements

The fundamental accounting equation

What is equity?

The residual interest in the assets of the entity after deducting all its liabilities.

Also can be understood as the claims of the owners in respect of the money that they have invested in the entity and for all the profits earned that have been reinvested in the entity

 

Equity = Assets - Liabilities

What are drawings?

A drawing account is a contra owner's equity account used to record the withdrawals of cash or other assets made by an owner from the enterprise for its personal use during the year. Drawings are a deduction from capital and will reduce owner's equity.