Why does a balance sheet always balance?

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I did accounting more than ten years ago in high school, but can’t remember it understand why if for example assets increase, the other side of the balance sheet also increases?

In: Economics

2 Answers

Anonymous 0 Comments

Because you can’t print or destroy money. If you’re assets increased, you must have paid for those assets somehow – so you have less cash or more debt or whatever it took to get that asset.

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