A balance sheet is an accounting tool used to summarize the financial status of a business or other entity. It generally lists assets on one side and liabilities on the other, and both sides are always in balance. Assets and liabilities are divided into short- and long-term obligations including cash accounts such as checking, money market, or government securities. At any given time, assets must equal liabilities plus owners equity. An asset is anything the business owns that has monetary value. Liabilities are the claims of creditors against the assets of the business. A balance sheet is usually prepared each month, quarter of a year, annually, or upon sale of the business, in order to show the overall condition of the company.
The North Dakota Balance Sheet is an important financial statement that provides a detailed overview of the financial position of the state of North Dakota. It showcases the state's assets, liabilities, and equity at a specific point in time. This document is prepared annually by the State's Office of Management and Budget (OMB) and is crucial for evaluating the state's financial health and stability. The North Dakota Balance Sheet is divided into three main sections: assets, liabilities, and equity. The assets section lists all the resources owned by the state, including cash, investments, property, buildings, infrastructure, and other tangible and intangible assets. These assets are classified as current or non-current, depending on their liquidity and expected duration of use. On the other hand, the liabilities section includes all the obligations and debts owed by the state. This may consist of outstanding loans, bonds, pension liabilities, accounts payable, and other accrued expenses. Similar to assets, liabilities are also categorized as current or non-current, based on their maturity dates. Equity, the third section of the North Dakota Balance Sheet, encapsulates the difference between the state's assets and liabilities. It represents the net worth or value of the state and includes items like retained earnings, reserves, and accumulated surpluses or deficits. Furthermore, there are two primary types of North Dakota Balance Sheets: the governmental fund balance sheet and the proprietary fund balance sheet. 1. Governmental Fund Balance Sheet: This document focuses on the state's general fund and various special funds that are used for general government operations. It presents the financial position of these funds separately and provides key information about the state's financial resources available for public services, such as education, healthcare, infrastructure development, and public safety. 2. Proprietary Fund Balance Sheet: This balance sheet focuses on enterprise funds, which are government-run activities intended to generate revenue and function similarly to private businesses. It highlights financial information related to various self-supporting operations like state-owned hospitals, utility services, transportation systems, and other revenue-generating entities. By carefully analyzing and comparing these balance sheets, policymakers, legislators, and financial analysts can gain insights into the financial stability, liquidity, and overall performance of North Dakota. These statements are essential for making informed decisions, setting budgets, assessing the state's ability to meet its obligations, and ensuring transparency in government financial affairs.
