Chapter 1 — Foundations & The Accounting Equation

Balance Sheet Builder

Learning Outcome Covered: 1.5b

Put the right accounts on a balance sheet — for a company with shareholders, and for a business with one owner

💰 Assets
💳 Liabilities
📊 Equity
🎯 Objective

Build a balance sheet with three sections: Assets, Liabilities and Equity. Some accounts do not belong on a balance sheet at all — leave those out.

📋 How to Play
  1. You get account pieces with dollar amounts
  2. Tap a piece to select it — the sections will highlight in blue
  3. Tap inside a blue dashed area to place the piece in that section
  4. Place every account that belongs on the balance sheet
  5. Leave out revenues, expenses, Dividends and Owner's Drawings
  6. When Assets = Liabilities + Equity, the green banner lights up
  7. Six rounds, three waves: a company owned by shareholders, then a business owned by one person, then two rounds where you decide which kind it is.
⭐ How stars work: more stars = a better result. 3 stars = no mistakes at all.

📚 What Goes on a Balance Sheet

📖 Three sections

A balance sheet shows what a business owns and owes on one date.

  • Assets — what the business OWNS: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Rent, Land, Building, Equipment, Vehicles, Furniture
  • Liabilities — what the business OWES: Accounts Payable, Salaries Payable, Interest Payable, Utilities Payable, Unearned Revenue, Notes Payable
  • Equity — the owners' share of the business

📊 Equity has two names

  • A company owned by shareholders is a corporation. Its equity accounts are Common Stock (what shareholders put in) and Retained Earnings (profit kept in the business).
  • A business owned by one person is a proprietorship. Its equity account is Owner's Capital.

The golden rule: Assets = Liabilities + Equity

⚠️ Traps to watch

  • Unearned Revenue stays. The word "Revenue" is the trick. The customer paid early and the business still owes the work, so it is a liability.
  • Prepaid Insurance and Prepaid Rent stay. Paid ahead, so they are assets.
  • Dividends and Owner's Drawings go out. They are money taken out for the owners. They are not assets and not expenses.

Revenue and expense accounts belong on the Income Statement.

💡 Cash is shown first. The game arranges each section for you; Chapter 4 teaches ordering.

Score
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Round
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Wave 1 — Corporation

Which kind of business is this?

Look at the owner accounts in this company's list.

{{COMPANY_NAME}}
Balance Sheet
{{DATE}}
Assets — what the business owns
Total Assets $0
Liabilities — what the business owes
Total Liabilities $0
Equity — the owners' share
Total Equity $0
Total Liabilities & Equity $0
✓ Assets = Liabilities + Equity
Account Pieces

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