Downloaded 39 times
More Related Content
Similar to The classified balance sheet
The classified balance sheet
- 1.
- 2. Balance Sheet At theend of the lesson students should be able to: Explain the concept of a Balance Sheet Identify the components of a Balance Sheet Classify items under the correct categories of a classified balance sheet Construct a classified Balance Sheet
- 3. Balance Sheet DEFINITION: A financialstatement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders. The balance sheet must follow the following formula: Assets = Liabilities + Shareholders' Equity
- 4. The Balance Sheet Assets Anythingthe Business Owns Order of Liquidity Liabilities Anything the Business Owes Promise of Money Maturity Date Owner’s Equity Beginning Capital – Add: Net Income – Less: Drawings and/or Net Loss – Ending Capital
- 5. The Account FormBalance Sheet
- 6. The Classified BalanceSheet Now that you are used to it... LET’S CHANGE IT!!
- 7. The Classified BalanceSheet Is a lot more specific than the balance sheet you are used to We are now grouping accounts within our main categories Assets & Liabilities more specifically Different categories allow us to dive into the numbers and compare similar items
- 8. ASSETS Assets are brokendown into two categories 1. Current Assets Assets that are smaller and easy to turn into cash within the year Cash, Accounts Receivable, Supplies, Inventory 1. Fixed Assets Sometimes called Plant & Equipment Long term assets used in making goods or providing services Large items: Equipment, Car, Building, Land
- 9. LIABILITIES Very similar toassets Broken into two groups 1. Current Liabilities Debts to be paid off within the year Accounts Payable, Bank Loan, HST Payable/Recoverable 1. Long-Term Liabilities Debts to be paid off in over a year Mortgage, Long-Term Bank Loan
- 10. Owner’s Equity What wehave already learned Beginning Balance Net Income/Loss Drawings New Balance
- 11. Analyzing Numbers A numberthat stakeholders like to know is called working capital The amount of money that the company should have to work with on a short term basis The higher the better Indicates how easily the business can pay off its debts Current Assets – Current Liabilities
- 12. The Classified BalanceSheet We are no longer going to put our balance sheet into Left Side and Right Side This was to teach you the difference between Debit Accounts and Credit Accounts We will be listing ours from top to bottom Kind of like the income statement There will be one column for the accounts There will be two columns for the numbers
- 13. PT’s PIZZA Balance Sheet October31, 2013
- 14. The Asset Section Assets CurrentAssets Cash xx Accounts Receivable xx Total Current Assets xx Fixed Assets Equipment xx Automobile xx Building xx Land xx Total Fixed Assets xx Total Assets xx
- 15. The Liabilities Section Liabilities CurrentLiabilities Accounts Payable xx HST Payable xx HST Recoverable (xx) Total Current Liabilities xx Long-Term Liabilities Bank Loan xx Mortgage Payable xx Total Long-Term Liabilities xx Total Liabilities xx
- 16. The Owner’s EquitySection Owner’s Equity D. Fense, Capital Oct. 31 $45000 Add: Net Income $1400 Less: D. Fense, Drawings ($950) $450 D. Fense, Capital Nov. 30 $45450
- 17. Put it alltogether... See question on the web site The following information was retrieved from the books of L. Sands. Fixtures and fittings $500, Stock valuing $300, Debtors totaling to $680, Cash at Bank amounted to $1510 and Cash $20, Creditors $910. He initially introduced $2000 capital and made a profit of $800. At the end of the period he withdrew $700. From the following construct a classified balance sheet. (MS Word)
- 18. Homework See assignment inGoogle docs
- 19. Reference Robinson S. &Wood F. (2004). Principles of Accounts for the Caribbean. Essex: Pearson Education Limited.