Balance Sheet
What is a Balance Sheet?
A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It includes assets, liabilities, and shareholders' equity, showing how resources are allocated within the organization.
What are the types of Balance Sheet?
There are two main types of balance sheets: 1. Classified balance sheet: This type categorizes assets and liabilities as current and non-current, providing a clear picture of liquidity and obligations. 2. Comparative balance sheet: This type compares the financial position of the company over different periods, enabling trend analysis and performance evaluation.
How to complete Balance Sheet
Completing a balance sheet involves the following steps: 1. Gather all financial statements, including income statements and cash flow statements. 2. List assets in order of liquidity, followed by liabilities in order of maturity. 3. Calculate shareholders' equity by subtracting liabilities from assets. 4. Ensure the balance sheet balances by verifying that total assets equal total liabilities and equity.
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