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Balance Sheet Format

The balance sheet shows a company's assets, liabilities and capital at a point in time. It is organized into sections for non-current assets, current assets, current liabilities, and capital/equity. Non-current assets include long-term assets like property, while current assets are liquid within a year like cash. Current liabilities are due within a year, and capital/equity represents the owner's investment and retained earnings.

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30 views

Balance Sheet Format

The balance sheet shows a company's assets, liabilities and capital at a point in time. It is organized into sections for non-current assets, current assets, current liabilities, and capital/equity. Non-current assets include long-term assets like property, while current assets are liquid within a year like cash. Current liabilities are due within a year, and capital/equity represents the owner's investment and retained earnings.

Uploaded by

Mia Johnson
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Balance Sheet

The balance sheet is another important statement for businesses. It is referred to as a


‘statement of financial position’ by the IAS. This statement shows the financial position of the
firm at a given point in time that is, its assets (what it owns) and its liabilities (what it owes).
The balance sheet is organized under headings such as ‘Non-current assets’ (Fixed Assets),
‘Current assets’, ‘Current liabilities’ and ‘Share capital’.
[Name]
Balance sheet as at XXXX
$ $ $
Non-current assets:
Premises XXX XXX
Motor vehicle XXX XXX
XXX XXX
Current assets:
Inventory XXX XXX
Accounts receivable XXX XXX
Less: Provision for bad debts (X XXX) XX XXX
Cash at bank XXX XXX
Cash in hand XXX XXX
Prepayment _XX XXX
XXX XXX

Less Current liabilities


Accounts payable XXX XXX
Short-term loans XXX XXX
Accruals X XXX (XXX XXX)
Working capital XXX XXX
XXX XXX
Less Non-current liabilities
Loan (XX XXX)
Capital Employed XXX XXX

Financed by:
Opening capital XXX XXX
Add net profit (Loss) XXX XXX
XXX XXX
Less Drawings XXX XXX
Closing capital XXX XXX
Main Components of the balance sheet:

1. Non-current assets (Fixed Assets) – these include assets that are durable (for example, physical
properties) and are used in the operations of the business. Their useful life is usually longer
than a year. These assets appear on the balance sheet in order of permanency – that is, the
most permanent first then least permanent.
2. Current assets – represents assets that can be easily be converted into cash, sold or consumed
within one-year. These appear in the balance sheet in the order of liquidity, starting with least
liquid and moving to most liquid.
3. Current liabilities – these are monies owed by the business that are expected to be repaid
within the next 12 months
4. Working capital or Net current assets – this is the difference between current assets and
current liabilities. It is the money that is used for the day-to-day expenses of the business. Low
working capital can result in serious liquidity problems for the firm.
5. Non-current liabilities – these are monies owed by the firm which are not expected to be paid
within a one year period.
6. Capital employed or Net assets – this is the total of Fixed and Current assets minus Current and
Long term liabilities. Total assets are usually financed by the owner(s) of the business in terms
of the capital they put in the business. This figure should be equal to the final figure in the
‘Financed by’ section.
7. Financed by – this segment shows how the business acquired finance for the business.
8. Accrued expense – An expense that the firm has used, but which has not yet been paid for.
9. Prepaid expense – An expense to be used up in a following period, but which has been for in
advance.
10. Bad debt – A debt that we will not be able to collect
11. Provision for bad debt – An account showing the expected amounts of debtors at the balance
sheet date who will not be able to pay their accounts.

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