The balance sheet shows a company's assets, liabilities, and owner's equity at a specific point in time. It is set up using the accounting equation Assets = Liabilities + Owner's Equity. The document provides an example balance sheet for Chris Turner dated July 15, 20__. It lists assets such as cash, bank balance, and equipment on the left side and liabilities such as amounts owed and overdue fines on the right side, with owner's equity listed at the bottom. The totals for assets and liabilities/equity are equal, following the accounting equation. Assets are generally listed from most liquid to least liquid, while liabilities are listed in the order normally paid.

1. *
Objective 1.9

2. Objective 1.9
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3. Objective 1.9
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*The balance sheet is set up in the form of the fundamental
accounting equation. A = L + OE. The assets appear on the left
side and the liabilities and owners equity appear on the right.
*A three line heading is used. The heading tells:
*Who- the name of the individual or business
*What – the name of the financial statement
*When – the date on which the financial position is determined

4. Objective 1.9
Chris Turner
Balance Sheet
July 15, 20__
Assets Liabilities
Cash $55.00 Owed to Phillip $80.00
Bank Balance $215.50 Owed to Dad $200.00
Bicycle $185.00 Overdue Fines $12.50
Stereo $250.00 Total Liabilities $292.50
Ski Equipment
Owners Equity
Chris Turner, Capital $713.00
Total Assets $1005.50 Total Liabilities and Equity $1005.50
Assets = Total Liabilities + Equity
Who
What
When

5. Objective 1.9
*Assets are generally listed in order of their liquidity ( ability to turn asset
into cash). The most liquid first such as cash, and bank balance are
listed first and followed up by other assets such as equipment's and
buildings.
*Liabilities are usually listed in the order which they are normally paid.
*The financial details are fully disclosed on a financial statement. For
example a building may be listed on the statement and have a value of
$114 000.00. The amount owed in the mortgage would be listed in the
liabilities as mortgage payable.
*The final totals are recorded on the same line on each side of the
balance sheet and underlined with a double line.

6. Objective 1.9
1. Headings
2. Assets
3. Liabilities
4. Owner’s Equity
5. Calculate
Totals
6. Dollar Signs
Preparing The
Balance Sheet
Handout