Description
introduction to balance sheet
BALANCE SHEET
Prepared by:Vaidehi Bhoir Roll no-20 MMS-1
Meaning:Balance sheet is statement of financial position. Statement of asset & liabilities of business at particular date. It shows the dual impact, which or comparative study of assets & liability. As balance sheet is a report, it has no debit & credit side. Balance sheet is an essential part of an Annual Report or Final account. Every business organisation prepare balance sheet to serve information to their shareholders, investors etc.
BALANCE SHEET
An essential part of final account.
Various Contain of final account:Trading account. Profit & loss account. Profit & loss appropriation account.
Balance sheet
IN THE BOOK OF XYZ COMPANY LTD
BALANCE SHEET
AS ON
31TH DECEMBER 2010 Amt(Rs.) xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx Goodwill Patents Copy right Tangible goods Land & Building Plant & Machinery Loose tool Investment Furniture & fixture Current asset Cash in hand Cash at bank Asset Intangible goods Amt(Rs.) xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
liabilities a) Capital Authorised capital Equity share capital Preference share capital Reserve & surplus (+) Net profit (-) Net loss (-) Drawings b) Current liabilities Sundry creditors Bills payable Out standing expenses Bank overdraft
Income received in advance c) Fixed non-current liabilities loans & advances contingent liabilities xxx xxx xxx
Prepaid expenses Sundry debtors Bills receivable Closing stock Prepaid loan Accrued income Miscellaneous expenses
xxx xxx xxx xxx xxx xxx xxx
ADJUSTMENT ENTRIES:Adjustment (1) Outstanding expenses (2) Adjustment entry Expenses A/c -Dr Treatment in balance sheet Shown on the liabilities Side.
To O/s expenses A/c
Prepaid expenses Prepaid expenses A/c -Dr Shown on the asset side. To expenses A/c
(3)
Closing stock
Closing stock
-Dr
Shown on the asset side.
To Trading A/c (4) Accrued income Accrued income -Dr To Income A/c Shown on the asset side.
(5)
Depreciation
(a) Depreciation A/c -Dr To assets A/c (b) Depreciation A/c To provision A/c
Deduct depreciation amt from assets on asset side.
(6)
Provision for baddebts
P/L A/c
-Dr
Shown on the liabilities Side.
To provision for bad-debts A/c
(7)
Provision for discount
P/L A/c
-Dr
Deduct from sundry Debtors on asset side.
To provision for discount on debtor A/c
(8)
Reserve for discount on Creditor.
Reserve for discount on Creditor A/c To P/L A/c -Dr
Deduct from creditors on liabilities.
LIMITATIONS OF BALANCE SHEET
Day-to-day changes cannot be filled, it has to be show in adjustment. It cannot determine exact position of an organisation. Different organisation use different polices, for exfor inventory LIFO,FIFO.for depreciation straight line method, fixed instalment method etc. Management makes balance sheet in the form of window-dressing to attract the attention of shareholders, investors etc.
BALANCE SHEET
Meaning. Essential parts of final A/c. Performa of balance sheet. Adjustment. Limitations.
THANK YOU!
doc_870000781.pptx
introduction to balance sheet
BALANCE SHEET
Prepared by:Vaidehi Bhoir Roll no-20 MMS-1
Meaning:Balance sheet is statement of financial position. Statement of asset & liabilities of business at particular date. It shows the dual impact, which or comparative study of assets & liability. As balance sheet is a report, it has no debit & credit side. Balance sheet is an essential part of an Annual Report or Final account. Every business organisation prepare balance sheet to serve information to their shareholders, investors etc.
BALANCE SHEET
An essential part of final account.
Various Contain of final account:Trading account. Profit & loss account. Profit & loss appropriation account.
Balance sheet
IN THE BOOK OF XYZ COMPANY LTD
BALANCE SHEET
AS ON
31TH DECEMBER 2010 Amt(Rs.) xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx Goodwill Patents Copy right Tangible goods Land & Building Plant & Machinery Loose tool Investment Furniture & fixture Current asset Cash in hand Cash at bank Asset Intangible goods Amt(Rs.) xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
liabilities a) Capital Authorised capital Equity share capital Preference share capital Reserve & surplus (+) Net profit (-) Net loss (-) Drawings b) Current liabilities Sundry creditors Bills payable Out standing expenses Bank overdraft
Income received in advance c) Fixed non-current liabilities loans & advances contingent liabilities xxx xxx xxx
Prepaid expenses Sundry debtors Bills receivable Closing stock Prepaid loan Accrued income Miscellaneous expenses
xxx xxx xxx xxx xxx xxx xxx
ADJUSTMENT ENTRIES:Adjustment (1) Outstanding expenses (2) Adjustment entry Expenses A/c -Dr Treatment in balance sheet Shown on the liabilities Side.
To O/s expenses A/c
Prepaid expenses Prepaid expenses A/c -Dr Shown on the asset side. To expenses A/c
(3)
Closing stock
Closing stock
-Dr
Shown on the asset side.
To Trading A/c (4) Accrued income Accrued income -Dr To Income A/c Shown on the asset side.
(5)
Depreciation
(a) Depreciation A/c -Dr To assets A/c (b) Depreciation A/c To provision A/c
Deduct depreciation amt from assets on asset side.
(6)
Provision for baddebts
P/L A/c
-Dr
Shown on the liabilities Side.
To provision for bad-debts A/c
(7)
Provision for discount
P/L A/c
-Dr
Deduct from sundry Debtors on asset side.
To provision for discount on debtor A/c
(8)
Reserve for discount on Creditor.
Reserve for discount on Creditor A/c To P/L A/c -Dr
Deduct from creditors on liabilities.
LIMITATIONS OF BALANCE SHEET
Day-to-day changes cannot be filled, it has to be show in adjustment. It cannot determine exact position of an organisation. Different organisation use different polices, for exfor inventory LIFO,FIFO.for depreciation straight line method, fixed instalment method etc. Management makes balance sheet in the form of window-dressing to attract the attention of shareholders, investors etc.
BALANCE SHEET
Meaning. Essential parts of final A/c. Performa of balance sheet. Adjustment. Limitations.
THANK YOU!
doc_870000781.pptx