Accountancy Presentation

Balance Sheet
Team 6:

Gaurav kumar
Nikhar agrawal
Saniya mirza
Nupur
Abhishek kumar
Apoorva priyadarshi
Piyush pushkar

INTRODUCTION
A Balance Sheet is a financial statement 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.

J.R. Batliboi:
A balance sheet is a statement prepared with a view to measure the
exact financial position of a business on a certain fixed date.

A. Palmer:
The balance sheet is a statement at a particular date showing on
one side the traders property and position and on the other hand the
liabilities.

NEED AND IMPORTANCE

To ascertain the true financial position of the
business at a particular point of time.
To ascertain the nature and cost of various
assets of the business, e.g. Closing Stock,
Debtors etc.
To determine the nature and amount of
various liabilities of the business.
To know the exact amount of capital at the
end of the year and the additions or
deductions made in the current year.

CHARACTERSTICS

A Balance Sheet is a part of the Final Accounts and is

prepared after the Trading and Profit and Loss A/c.
It is a summary of Personal and Real Accounts.
Debit balances of these accounts are put on the right
sideAssets whereas the Credit balances are put on
the left side-Liabilities.
The totals balances of Assets and Liabilities should be
equal.
It is prepared at the end of the Financial Year.
It shows the financial position of the business
according to the Going Concern Concept.

CLASSSIFICATION OF
ASSETS

Fixed Assets - those assets which are

acquired for continuous use and not intended
for sale such as land & building, plant &
machinery, motor vehicle, furniture, etc.

Current Assets -those assets which are

either in form of cash or can be easily
converted into cash within one year of the
date of balance sheet such as cash, B/R, short
term investments, debtor, closing stock etc.

 Liquid

Assets- Those assets which are either in

form of cash or can be quickly converted into
cash, such as Cash, B/R, Debtors, Accrued Income
etc.

Tangible

Assets- Those assets which have a

physical existence like Plant and Machinery,
Building, Furniture, Stock, Cash etc.

Intangible

assets are Those assets which do not

have physical existence or which cannot be seen
or felt such as Goodwill, Trademark, Patents etc.

CLASSIFICATION OF
LIABILITIES
Fixed

Liabilities- Those liabilities which are

to be repaid after one year or more such as
Public deposits, Long-term loans, Debentures
etc.

Current

Liabilities- Those liabilities which

are expected to be paid within one year of
the date of the Balance Sheet such as Bank
OD, Creditors, B/P, Outstanding Expenses
etc.

Arrangements of Assets &

Liabilities
1.

In the Order of Liquidity

Most easily convertible assets written first

such as cash in hand and follow those assets
which are comparatively less easily
convertible.
Current liabilities are written first of all, then
fixed or long term liabilities and lastly, the
proprietors capital.

2.In the Order of Permanence

Assets which are most difficult to be converted into

cash such as Goodwill are written first and the assets
which are most liquids such as cash in hand are written
last.

Liabilities which are to be paid last will be written first

such as proprietors capital, then fixed or long term
liabilities and lastly, the current liabilities.

Points to remember:
Trial

balance if not given, prepare it.

Items of Trial Balance should be shown once and
outside Trial balance Adjustments have to be
shown at two places.
Debit side items - Dr. side of Trading & P/L or
Assets side of Balance Sheet.
Credit side items- Cr. Side of Trading & P/L or
Liabilities side of Balance
Sheet.
Personal and Real Account balances are always
shown in the Balance Sheet.

All balances related to Goods such as

purchases, sales and expenses directly
related to these are recorded in Trading
Account.

All

Indirect Expenses will be shown in P/L

Account.
The total of both sides of the balance
sheet will always be equal.

Trial Balance of Bharat Sons Ltd. (for the year ending 31 st March, 2008)

PARTICULARS

Trading & P/L Account of Bharat Sons Ltd.

(for the year ending 31st March, 2008)

To Opening stock
To Purchases

812525

Add: Omitted
purchases

6,000

AMOUNT

PARTICULARS

AMOUNTT

1,33,625

By Sales

1,262,000

By Loss by fire

7,500

By Closing stock

62,750

8,18,525

To Wages

1,15,685

To Power and fuel

6,750

To Gross profit c/d

2,57,665
1,332,250

1,332,250

To Irrecoverable Loss of stock

2,500

By Gross Profit b/d

To Salaries

27,875

By Provision for
Doubtful debts

To Postage

21,130

Less: 5% Provision 12,425

13,575

To Trade Expenses

29,155

By Interest on Loan

500

To Bad Debts

2625

Add: Further
Bad Debts

2500

5,125

To Depreciation

3,625

To Net Profit

1,82,330

2,57,665
26,000

Balance Sheet of Bharat Sons Ltd.

(as on 31st March,2008)
LIABILITIES

AMOUNT

ASSETS

AMOUNT

CAPITAL

FIXED ASSETS

Opening balance
50,000

Furniture

Less: Drawings
22,260

Less: Depreciation 3,625

36,250
32,625

27,740
Add: Net Profit

1,82,330

2,10,070

CURRENT ASSETS
Insurance Co.

5,000

CURRENT LIABILITIES

Cash in Hand

50,000

Creditors

Closing Stock

62,750

1,52,630

Add: Omitted
Purchases
6,000

1,58,630

Sundry Debtors
2,51,000
Less: Bad Debts
2,500

Bills Payable

19,750

Less: PBD
12,425

Outstanding Wages

10,000

Loan to Ram

2,36,075

SUMMARY

Thebalance sheetof a business gives you a picture of

everything the business has. It shows you all the cash

the business has received and what it has done with it.
Assetsare all the things the business owns, such as
property, or computers, or cash in the
bank.Liabilitiesare all the things the business has
that belong to someone else, for example any loans it
has taken out.
A balance sheet lays out the ending balances in a
company's asset, liability, and equity accounts as of
the date stated on the report.
The most common use of the balance sheet is to
determine the liquidity of a business

Thank
You!