ACCOUNTING



ACCOUNTING

THE BALANCE SHEET

1. Definition:

2. Example of a Balance Sheet

| Steve’s Pizza - WHO – Name of Business |

|Balance Sheet - WHAT – Name of Statement |

|December 31, 20 - WHEN – Date of Statement |

|ASSETS | |LIABILITIES | |

| | | | |

|Cash |$26 158.00 |Accounts Payable | |

|Accounts Receivable | |Pizza Wholesale Ltd. |$18 925.00 |

|Joe’s Place |4 192.00 |Bank Loan |52 496.00 |

|Waldo’s Deli |3 720.00 |Mortgage on Building |96 000.00 |

|Supplies |14 250.00 |TOTAL LIABILITIES |$167 421.00 |

|Equipment |95 000.00 | | |

|Building |140 000.00 |OWNER’S EQUITY | |

|Land |150 000.00 | | |

| | |Steve Switzer, Equity |$265 899.00 |

| | | | |

|TOTAL ASSETS |$433 320.00 |TOTAL LIABILITES AND EQUITY |$433 320.00 |

Indicates calculations are completed Indicates added or subtracted to a figure

3. The Types of Accounts in a Balance Sheet

a) ______________________ Items owned by a business that have value.

b) ______________________ Amounts owed by a business to others (i.e. Debts)

c) ______________________ What is left after all debts have been accounted for. (the difference between assets and liabilities)

4. Preparing a Balance Sheet

A balance sheet is a formal financial statement. Therefore, it must be written using the proper format.

Pay special attention to the location and set up of each section.

_________________________

|Robert's Sports Facility |

|Balance Sheet |

|June 30, 20-- |

|  |  |  |  |

|ASSETS | LIABILITIES |

|Cash | $ 6,000.00 | Accounts Payable | $ 4,500.00 |

|Accounts Receivable | 3,500.00 | Bank Loan | 60,000.00 |

|Office Supplies | 550.00 | Mortgage Payable | 85,000.00 |

|Training Equipment | 95,000.00 | TOTAL LIABILITIES | $149,500.00 |

|Building | 100,000.00 |  |  |

|Land | 35,000.00 | OWNER'S EQUITY |

| | | B. Smith, Capital | $ 90,550.00 |

| | | |  |

|TOTAL ASSETS | $240,050.00 | TOTAL LIABILITIES AND | $240,050.00 |

| | |OWNER'S EQUITY | |

Assets are always listed on the LEFT side, in order of liquidity.

Liabilities are always listed on the RIGHT side, in order of payment, from weekly to monthly.

Accounts Receivable – people/companies that owe you money

(i.e. They have purchased goods but not yet paid for them.)

Accounts Payable – people/companies that are owed money- you need to pay them

The balance sheet focuses on the fundamental accounting equation:

Assets = Liabilities + Owner’s Equity

The accounting equation can be manipulated to calculate owner’s equity and liabilities:

• Owner’s Equity = Assets – Liabilities

• Liabilities = Assets – Owner’s Equity

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download