Balance Sheet

What is a Balance Sheet

  • A formal financial statement that illustrates a company’s financial position
  • It is a two column document which lists assets on the left side, and liabilities and equity on the right side (fundamental accounting equation)
Headings
  • Who – Name of the Company
  • What – Type of Statement you are producing
  • When – Specific date in time
Assets
  • Listed in the left hand column
  • Title Assets is bold, underlined and centered in the column
  • Assets are listed in order of liquidity
    • Cash/Bank
    • Accounts Receivable
    • Supplies
    • Equipment/Furniture
    • Vehicles
    • Land
  • Accounts Receivable are accounts in which people owe money to the company
  • If there is only 1 AR, it is listed with the person/company’s name
  • If there are multiple, the title Accounts Receivable is placed in the column and then each account is indented underneath the title
  • The title total assets is placed at the bottom of the column with the total
Liabilities
  • Title is bolded, underlined, and centered at the top of the right hand column
  • Liabilities are listed in order of which they are due
    • Accounts Payable
    • Bank Loan
    • Mortgage
  • Accounts Payable are debts that you owe people/companies
  • There are handled the same way as accounts receivable on the balance sheet
  • Liabilities are totalled with the heading total liabilities
Owner’s Equity
  • Title appears underneath total liabilities
  • There is only one title in this section
  • The title is the owner’s first initial followed by their last name and the word capital
Other Features
  • Dollar signs appear at the top of each column and every double underlined total
  • Single underlines indicate that you are totalling a column
  • Double underlines indicate a final total
  • The entire right hand column is totalled with the title Total Liabilities and Owner’s Equity (the sum of the total liabilities and capital)
  • The totals for total assets and total liabilities and equity must appear on the same line
  • The totals for total assets and total liabilities and equity must have the same total

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Topics 1) What is Accounting? 2) Financial Position 3) Balance Sheet 4) GAAP 5) Equation Analysis Sheet 6) Analyzing a Transaction 7) Ledger Account 8) Trial Balance 9) Expanded Ledger 10) Income Statement 11) New GAAP 12) Report Form Balance Sheet 13) The Journal 14) Source Documents 15) GAAP for Journal 16) Sales Tax 17) Posting 18) Comparative Income Statement 19) Classified Balance Sheet 20) Adjustments 21) Closing Procedures 22) Depreciation 23) Merchandise Business
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