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What Is The Statement of Financial Position?

The document summarizes the statement of financial position, also known as the balance sheet. It reports an entity's assets, liabilities, and stockholders' equity/net assets as of the end of an accounting period. The statement of financial position structure follows the basic accounting equation, with assets equal to liabilities plus stockholders' equity for corporations and assets equal to liabilities plus net assets for nonprofits. It must adhere to accounting principles like cost, matching, and full disclosure for meaningful reporting, preferably under the accrual method of accounting.

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44 views

What Is The Statement of Financial Position?

The document summarizes the statement of financial position, also known as the balance sheet. It reports an entity's assets, liabilities, and stockholders' equity/net assets as of the end of an accounting period. The statement of financial position structure follows the basic accounting equation, with assets equal to liabilities plus stockholders' equity for corporations and assets equal to liabilities plus net assets for nonprofits. It must adhere to accounting principles like cost, matching, and full disclosure for meaningful reporting, preferably under the accrual method of accounting.

Uploaded by

KARISHMAATA2
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What is the statement of financial position?


The statement of financial position is another name for the balance sheet. It is one of the main financial statements and it reports an entity's assets, liabilities, and the difference in their totals. The amounts reported on the statement of financial position are the amounts as of the final moment of an accounting period. The structure of the statement of financial position is similar to the basic accounting equation. For instance, a corporation will report amounts in the following format: Assets = Liabilities + Stockholders' Equity. A nonprofit organization's format will be: Assets = Liabilities + Net Assets. The statement of financial position must reflect the basic accounting principles and guidelines such as the cost, matching, and full disclosure principles. Accordingly, the statement of financial position is more meaningful when it is prepared under the accrual method of accounting.

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