What is a Balance Sheet ?
Balance Sheet
A
balance sheet is a statement of the financial position of the company, it terms
of capital, assets and liabilities. Let
us see what goes into the balance sheet and what it reflects.
Assets – Liabilities = Capital
The two sides of the balance sheet show the following:
Left Hand Side
Capital and Liabilities
Sources
Where the finances came from
What the business owes
Right Hand Side
Assets
Uses
Where the finances went to
What the business owns
A balance sheet of the company may have the following
information.
Balance Sheet
_____________________________________________________________________________________
Liabilities
Amount
Assets Amount
Sundry or Trade Creditors Cash in Hand
Bills Payable Cash
Bank Overdraft Cash
at Bank
Employees Provident Fund Bills
Receivable
Loans (Cr.) Sundry
Debtors
Mortage Loans
(Dr.)
Reserve/Res. Fund Capital
Capital Closing
Stock
Add Interest on Capital Investments
Add Net Profit Furniture
and Fittings
Less Drawings Loose
Tools
Less Income Tax Plant
& Machinery
Less Interest on Drawings Horses
& Carts
Less Net Loss Land
and Buildings
Outstanding Expenses Freehold/Leasehold
Land
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