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. The Accounting equation which is Assets=Liabilities+Stockholder’s Equity is closely link to the Balance Sheet. Because of this accounting equation and the double entry system, the Balance sheet must always tally.
Below we have two formats namely the Horizontal and Vertical Presentation to display the Balance sheet of a company:-
(a)Format of A Balance Sheet: Horizontal Presentation
The horizontal presentation uses a format that present assets on the left and liabilities and equity on the right
XYZ Company
Balance Sheet As at December 31st 2008
|
Assets |
|
Liabilities & Stockholders’ Equity |
|
|
$ |
|
$ |
|
| Current Assets |
|
Current Liabilities | |
| Cash |
10,000 |
Accounts payable |
15,000 |
| Accounts Receivable |
20,000 |
Salaries Payable |
9,000 |
| Inventories |
30,000 |
Total Current Liabilities |
24,000 |
| Deposits, prepayments |
5,000 |
Bonds payable |
20,000 |
| Total Current Assets |
65,000 |
Mortgages |
35,000 |
|
|
Total Liabilities |
79,000 |
|
|
|
Stockholders’ equity |
|
|
| Property, plant and equipment, net |
55,000 |
Common stock |
50,000 |
| Intangible assets |
10,000 |
Retained earnings |
1,000 |
| Total Assets |
130,000 |
Total Liabilities and Stockholders’ equity |
130,000 |
(b) The Vertical Presentation of The Format Of A Balance Sheet
The vertical presentation show the assets followed by liabilities and equity directly below the assets.
XYZ Company
Balance Sheet As At 31 st December 2008
| Assets |
|
| Current Assets |
|
| Cash |
10,000 |
| Accounts Receivable |
20,000 |
| Inventories |
30,000 |
| Deposits, prepayments |
5,000 |
| Total Current Assets |
65,000 |
|
|
|
| Non Current Assets |
|
| Property, plant and equipment, net |
55,000 |
| Intangible assets |
10,000 |
| Total Non Current Assets |
65,000 |
| Total Assets |
130,000 |
| Liabilities & Stockholders’ Equity | |
|
|
$ |
| Current Liabilities |
|
| Accounts payable |
15,000 |
| Salaries Payable |
9,000 |
| Total Current Liabilities |
24,000 |
|
|
|
| Non Current Liabilities |
|
| Long Term Bonds payable |
20,000 |
| Mortgages |
35,000 |
| Total Non Current Liabilities |
55,000 |
| Total Liabilities |
79,000 |
| Stockholders’ equity |
|
| Common stock |
50,000 |
| Retained earnings |
1,000 |
| Total Liabilities and Stockholders’ equity |
130,000 |