Introduction to Balance Sheets - Revised

Learn more about balance sheets and how they are used for personal finances.

Free Course
Introduce yourself to the basics of balance sheets. This course will teach you how to value and calculate your assets. This course will show you how you can use your balance sheets to make important financial decisions such as the decision to rent versus buy. You will also learn about different loan types and how the loan process works. This course is designed to give anyone a basic understanding of balance sheets and personal finances.
  • Duration

    1-2 Hours
  • Assessment

  • Certification

  • Responsive

  • Publisher

    Khan Academy




View course modules


This course, Introduction to Balance Sheets will introduce you to the basics of what a balance sheet is, its purpose and how to do a balance sheet.

The balance sheet is a basic accounting concept used to calculate how much cash, assets and liabilities are in our accounts at the end of the day. It is a very useful tool for both personal finances as well as business accounts. Knowing how to work through a basic balance sheet is an essential skill that everybody should know how to do and balance sheets are an excellent way to put your personal finances into perspective on paper.

In this free online course, the basics of balance sheets are discussed with particular regards to the case study of buying a house versus renting a house, and topics such as assets, liabilities, equity and marking to market are reviewed.

This free online course will be of interest to the average lay person wishing to learn about balance sheets and how they can use balance sheets to organise their finances when deciding to invest in property or take out a loan for whatever reason.

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Learning Outcomes

Having completed this course, you will be able to:

  • Understand the basic accounting concept of balance sheets
  • Examine personal finances using balance sheets
  • Evaluate the pros and cons of personal debt when considering a loan
  • Approach balance sheets with a better understanding of how they function
  • Discuss the differences between buying and renting
  • Explain what collateral is
  • Perform a detailed analysis of the decision between buying and renting
  • Understand what a Home Equity Loan is
  • Explain why banks ask for a downpayment of between 20 and 25%


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