Balance sheet

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Balance Sheet

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Balance sheet

  1. 1. Amity International Business School AIBS MIB, Semester 1Accounting and Finance Navneet Saxena
  2. 2. Objective Amity International Business School• In this session we will learn about – Balance Sheet
  3. 3. Balance Sheet Amity International Business School• A Balance Sheet is one of the financial statements• A Balance Sheet is a statement of assets and liabilities of an enterprise at a given date• It is called a Balance Sheet because it is a sheet of balances of those ledger accounts which have not been closed till the preparation of the Trading and Profit and Loss Account
  4. 4. Characteristics Amity International Business School• A Balance Sheet is only a statement and not an account• It has no debit side or credit side• The headings of the two sides are Assets and Liabilities• A Balance Sheet is prepared at a particular point of time and not for a particular period
  5. 5. Characteristics Amity International Business School• The information contained in a Balance Sheet is true only at the particular point of time at which it is prepared• A Balance Sheet is a summary of balances of those ledger accounts which have not been closed by transfer to the Trading and Profit and Loss Account• A Balance Sheet shows the nature and value of assets and the nature and the amount of liabilities at a given date
  6. 6. Need for PreparationAmity International Business School of Balance Sheet• To ascertain the nature and value of assets of a business• To ascertain the nature and amount of liabilities of a business• To find out the financial solvency of an enterprise – An enterprise is considered to be solvent if its assets exceed its external liabilities
  7. 7. Contents of Amity International Business School Balance Sheet• Assets – Current Assets – Investments – Fixed Assets • Tangible Fixed Assets • Intangible Fixed Assets
  8. 8. Contents of Amity International Business School Balance Sheet• Liabilities Side – Liabilities • Current Liability • Long-term Liability – Capital
  9. 9. Grouping and Marshalling Amity International Business School of Assets and Liabilities• Grouping – putting together items of a similar nature under a common heading• Marshalling – order in which the various assets and liabilities are shown in the Balance Sheet• The assets and liabilities can be shown either in the – Order of liquidity – Order of permanency
  10. 10. Amity International Business School
  11. 11. Recap Amity International Business School• In this session we learnt about – Balance Sheet
  12. 12. Next Session Amity International Business School• In the next session we will learn about – Final Accounts

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