Explain the three main areas of the balance sheet

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Answer: The three main areas of the balance sheet are assets, liabilities, and owners' equity. Assets include items of economic value owned by the company—they can be physical (for example, buildings), financial (such as accounts receivable), or intellectual (including patents). Assets also include cash itself. Liabilities are the amounts of money that the company owes to others, such as payroll to employees, taxes to government, borrowed money to banks, and bills for materials or services to creditors. Owners' equity is what is left over from the assets after all liabilities have been settled.