UK Question about the balance sheet

[po55kit]

Hello!

I am a 19 year old and I am studying accounting alone with some books in my spare time. Only been going for a few week so I am not an expert yet.

I have a question about the balance sheet.

I understand that Assets=Claims

However, if a business had £100 million in assets but a £300million debt to the bank, than how could this possibly balance?

 

[Triest123]

Hello!

I am a 19 year old and I am studying accounting alone with some books in my spare time. Only been going for a few week so I am not an expert yet.

I have a question about the balance sheet.

I understand that Assets=Claims

However, if a business had £100 million in assets but a £300million debt to the bank, than how could this possibly balance?

You will get the answer from the following equation :

Assets = Capital + Retained earnings + Liabilities OR
Assets = Capital - Retained loss + Liabilities

 

[po55kit]

You will get the answer from the following equation :

Assets = Capital + Retained earnings + Liabilities OR
Assets = Capital - Retained loss + Liabilities

Thanks. Please could you elaborate?

Retained profit/loss does not appear on the assets side of the BS so I don't see how this could work.