As discussed earlier on the two formats of Income statement, similarly we have two formats normally prepared by bookeepers for their companies. Before preparing the format we need to understand that a Balance Sheet is called the Statement of Financial Position. as it is a snapshot of a company’s financial position at a particular point in time. [...]
Snapshot of how to prepare the Income statement,Owner’s equity statement and Balance sheet statement
Append below, a simple snapshot of preparing the following financial statements: (a) How to prepare the Income Statement: All temporary or nominal accounts relating to incomes and expenses are closed by using closing entries and transferred to the Income Statement/Summary Journalize the closing entries as follows: For all Revenue accounts: Debit Revenue Account Credit Income [...]
In the Balance Sheet, one key category is the Share Capital. At times, we might get confuse with the various classification of share capital.
Let understand what’s reserves:- RESERVES Reserves are appropriations of profit namely when profits have been ascertained after deducting all expenses which includes provision and others. Reserves are residual earnings after all expenses and taxation which belongs to the owners namely the shareholders. There are essentially two(2) types of Reserves: · Capital Reserves · Revenue Reserves [...]
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If you refer to below accounting equation, owner’s equity form one of the three key elements of a Balance Sheet. Let understand &/define Owner’s Equity:
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In this Part 3, let’s look at what are really long term liabilities in a typical Balance Sheet:
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In this Part 2, let’s understand what are current liabilities:
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This Part 1 explains what’s liabilities the component of the total liabilities side of a typical Balance Sheet:
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This last part of the article deals with non-current assets of a Balance Sheet. They consists of the Fixed Assets and Long Term Investments. Let understand the following:
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This part 2 of the assets side of the Balance Sheet specifically looks what’s current assets and its components: WHAT ARE CURRENT ASSETS? Current assets are assets: that are expected to be realised in, or is held for sale or consumption in, the normal course of the enterprise’s operating cycle ; or [...]
Continue reading about Assets(Current Asset) Side Of The Balance Sheet(Part2of3)
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