Balance Sheet

An itemized financial statement setting forth personal or corporate assets, liabilities, and net worth (the difference between assets and liabilities) as of a specified date. It is a quick cross section analysis of the business. Most lending institutions require an applicant for real estate financing to submit a balance sheet, usually on a form attached to the loan application. Some lenders also require a profit and loss statement showing income and expenses. Some states have enacted false statement acts to penalize the falsification of statements used in the loan process.