Now we can look at all the obligations or claims on these resources which are the liabilities and stockholder's equity. Dave owes the bank $80,000 at December 31, 2015. That's a liability called bank debt. There's $50,000 of stockholder's investment as of December 31. This is a stockholder's equity called common stock. And then there are retained earnings of $27,000. Retained earnings represent all of the net income or accounting income that's been created over the life of the company, minus any dividends that have been paid out, which we'll talk about later. And when we add it all up, the obligations are the same as the resources of $157,000. And this is characteristic of the balance sheet which always has to balance, hence the name.