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  • Balance Sheet: Business Studies

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    Imon Banik
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    A balance sheet is a financial statement that lists a business's assets (what it owns), liabilities (what it owes), and equity (the owner's investment) on a specific date. It provides a snapshot of those accounts on that date. Assets are categorized as current assets, which are expected to be used within one year, and fixed assets, which will be held for several years. Liabilities include current liabilities, which must be paid within one year, and long-term liabilities that are due after one year. The balance sheet balances by having total assets equal to the sum of total liabilities and equity.

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    A balance sheet is a financial statement that lists a business's assets (what it owns), liabilities (what it owes), and equity (the owner's investment) on a specific date. It provides a snapshot of those accounts on that date. Assets are categorized as current assets, which are expected to be used within one year, and fixed assets, which will be held for several years. Liabilities include current liabilities, which must be paid within one year, and long-term liabilities that are due after one year. The balance sheet balances by having total assets equal to the sum of total liabilities and equity.

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    19 views12 pages

    Balance Sheet: Business Studies

    Uploaded by

    Imon Banik
    A balance sheet is a financial statement that lists a business's assets (what it owns), liabilities (what it owes), and equity (the owner's investment) on a specific date. It provides a snapshot of those accounts on that date. Assets are categorized as current assets, which are expected to be used within one year, and fixed assets, which will be held for several years. Liabilities include current liabilities, which must be paid within one year, and long-term liabilities that are due after one year. The balance sheet balances by having total assets equal to the sum of total liabilities and equity.

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 12

    Balance sheet

    Business Studies

    What is a balance sheet?


    The balance sheet is a financial statement.
    It is a list of all the assets (what the business
    owns) and all the liabilities (what the business
    owes) of a business.

    The balance sheet is a financial


    snap shot
    It lists the assets and
    liabilities of the
    business on a
    particular day.

    FIXED ASSETS
    These are assets that the
    business owns.
    They will keep these
    assets for several years
    so they are fixed.
    Examples: Buildings ,
    Machinery, Vehicles

    CURRENT ASSETS
    Current assets mean
    that the assets will not
    stay in the business
    for long.
    Examples: materials,
    debtors, money in the
    bank, petty cash

    CURRENT LIABILITIES
    The amount of money that
    a business owes other
    people and other
    businesses (creditors).
    Liabilities are current
    because the amount owed
    can vary from one day to
    the next.
    They must be paid back
    within a year.

    NET CURRENT ASSETS

    ASSETS
    minus
    (current & fixed)

    LIABILITIES
    (current)

    LONG TERM LIABILITIES


    These are debts need
    paying back in the
    future (one year +)
    Examples: Loans,
    mortgages

    NET ASSETS
    ASSETS
    minus
    (current & fixed)

    LIABILITIES
    (Current & fixed)

    The second section of the balance


    sheet
    This looks at where the money which was
    used to buy the long term and short term
    assets came from

    The start up of the business is


    funded by:
    CAPITAL & RESERVES
    SHARE CAPITAL The amount of money paid by
    shareholders in return for a share in the business.
    PROFIT & LOSS ACCOUNT Net profit from the previous
    financial year is transferred into the balance sheet.
    RETAINED PROFIT businesses do not give all of their
    profits back to shareholder

    Exercise

    NET ASSETS SHOULD EQUAL THE


    AMOUNT OF MONEY THAT HAS BEEN
    INVESTED IN THE BUSINESS.
    BOTH PARTS OF THE BALANCE SHEET
    MUST BALANCE

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