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Kavitesh Chandra
Jul 24, 2023
Expert Answer ✅️
Step 1:
A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It presents a summary of a company's assets, liabilities, and shareholders' equity.
Step 2:
There are two main sections on a balance sheet:
1. Assets: This section lists all the resources owned by the company, which can be tangible or intangible. Common examples of assets include cash, accounts receivable, inventory, property, plant, and equipment.
2. Liabilities and Shareholders' Equity: This section represents the sources of financing for the company's assets. It includes both the company's debts (liabilities) and the shareholders' investment in the company (shareholders' equity). Liabilities can include accounts payable, loans, and accrued expenses. Shareholders' equity includes the company's retained earnings and any capital contributed by the shareholders.
To determine the balance sheet equation, you need to remember the fundamental accounting equation, which states:
Assets = Liabilities + Shareholders' Equity
This equation ensures that the total value of a company's assets is equal to the sum of its liabilities and shareholders' equity.
By arranging the elements in the equation, you can construct a balance sheet. The assets are listed on the left side, and the liabilities and shareholders' equity are listed on the right side.
Here's an example of a simplified balance sheet:
ASSETS
-----------------------------
Cash $10,000
Accounts Receivable $5,000
Inventory $20,000
TOTAL ASSETS $35,000
-----------------------------
LIABILITIES
-----------------------------
Accounts Payable $8,000
Loans Payable $12,000
TOTAL LIABILITIES $20,000
-----------------------------
SHAREHOLDERS' EQUITY
-----------------------------
Retained Earnings $10,000
Capital Stock $5,000
TOTAL SHAREHOLDERS' EQUITY $15,000
-----------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $35,000
-----------------------------
In this example, the company has $35,000 in assets, which are financed by $20,000 in liabilities and $15,000 in shareholders' equity. The balance sheet provides a clear overview of the company's financial position.
I hope this helps . If you have more questions fell free to ask .
Happy studying 📖. Beet wishes towards your studies.
Step 1:
A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It presents a summary of a company's assets, liabilities, and shareholders' equity.
Step 2:
There are two main sections on a balance sheet:
1. Assets: This section lists all the resources owned by the company, which can be tangible or intangible. Common examples of assets include cash, accounts receivable, inventory, property, plant, and equipment.
2. Liabilities and Shareholders' Equity: This section represents the sources of financing for the company's assets. It includes both the company's debts (liabilities) and the shareholders' investment in the company (shareholders' equity). Liabilities can include accounts payable, loans, and accrued expenses. Shareholders' equity includes the company's retained earnings and any capital contributed by the shareholders.
To determine the balance sheet equation, you need to remember the fundamental accounting equation, which states:
Assets = Liabilities + Shareholders' Equity
This equation ensures that the total value of a company's assets is equal to the sum of its liabilities and shareholders' equity.
By arranging the elements in the equation, you can construct a balance sheet. The assets are listed on the left side, and the liabilities and shareholders' equity are listed on the right side.
Here's an example of a simplified balance sheet:
ASSETS
-----------------------------
Cash $10,000
Accounts Receivable $5,000
Inventory $20,000
TOTAL ASSETS $35,000
-----------------------------
LIABILITIES
-----------------------------
Accounts Payable $8,000
Loans Payable $12,000
TOTAL LIABILITIES $20,000
-----------------------------
SHAREHOLDERS' EQUITY
-----------------------------
Retained Earnings $10,000
Capital Stock $5,000
TOTAL SHAREHOLDERS' EQUITY $15,000
-----------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $35,000
-----------------------------
In this example, the company has $35,000 in assets, which are financed by $20,000 in liabilities and $15,000 in shareholders' equity. The balance sheet provides a clear overview of the company's financial position.
I hope this helps . If you have more questions fell free to ask .
Happy studying 📖. Beet wishes towards your studies.
3
Anonymous
Sep 9, 2023
Atikur is tha best student
2
Basiru Salifu
Nov 20, 2023
What is noun and mention any 2 type you know
1
Jonah Samson
Mar 27
What is balance sheets
0
Jonah Samson
Mar 27
What is acceptable
0
Jonah Samson
Mar 27
Types of preposition
0
Anonymous
Aug 12
The campany has 35000 in assets,which are financed by 20000 in liabilities on 15000 in shareholders equity the balance sheet provides a clear over view of the company financial position
0
