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Tuesday, 29 May 2012

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The balance sheet or statement of financial position reports assets, liabilities, owner’s or stockholders’ equity at a point in time. Some terms that apply to balance sheets include: assets resources, things owned, and prepaid or deferred expenses; examples include cash, accounts receivable, inventory, prepaid insurance, land, equipment, vehicles, furnishings.
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liabilities obligations and deferred revenues; examples include accounts payable, loans payable, wages payable, interest payable, customer deposits, deferred revenues. owner’s equity a sole proprietorship’s assets minus its liabilities. stockholders’ equity a corporation’s assets minus its liabilities; reports paid-in capital, retained earnings, and treasury stock. accounting equation Assets = Liabilities + Stockholders’ (Owner’s) Equity. classified balance sheet groups assets into the following classification: current assets, investments, property, plant and equipment, and other assets. Liabilities are classified as either current or long-term. current asset will turn to cash within one year of the date of the balance sheet (unless the operating cycle is greater than one year). current liability an obligation that will become due within one year of the balance sheet date (unless the operating cycle is greater than one year).


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