crossorigin="anonymous"> Balance sheet format along with explanation best 01 answer

Balance sheet format

Balance sheet format
Balance sheet format

Meaning of Balance Sheet:- Balance Sheet involves liability and assets which all are equal in all terms. Both sides of the Balance sheet must be Tally liability to assets.

In Other words:- Balance sheet reflects two sides as debit or credit. Debit side shows Liabilities as well as credit side shows Assets.

Capital + Liabilities = Assets

Liabilities Amt. AssetsAmt.
Current Liabilities
Outstanding Exp.
Bills Payable
Bank Overdraft
Sundry Creditors
Short term Loans & Advances
Unearned Income 

XXX
XXX
XXX
XXX
XXX

XXX
Current Assets
Cash in Hand
Cash at Bank
Bills Receivable
Trade Debtors
Closing Stock:(i) Raw Material (ii)Work in Progress (iii)Finished Goods
Prepaid Expenses
Accrued Income 

XXX
XXX
XXX
XXX

XXXXXXXXX
XXX
XXX
Fixed Liabilities
Long Term Loans
Public Deposits 

XXX
XXX
Fixed Assets
Loose Tools
Furniture
Motor Vehicles
Plant and Machinery
XXX
XXX
XXX
XXX
XXX
Capital
Add Net Profit ( or Less Net Loss )
Less Drawing 
XXX
XXX

XXX
Patents and TradeMarks
Goodwill
Fictitious Assets 
XXX

XXX
XXX

Assets in the Balance Sheet may be Classified as following.

  1. Fixed Assets:- These types of assets are of a permanent nature. Which are used in the operations of business and not intended for sale. As per this definition these assets are like Building, Furniture, Plant, Machinery, office, Fixtures and Patents. So investment held for a long period is treated as Fixed Assets.
  2. Intangible Assets:- These types of assets cannot be seen or touched but in the accounting language it has some values. These assets are as Goodwill, Patents, TradeMarks and Copyrights etc.
  3. Current Assets:- Current assets are those assets which are convertible into cash generally in one year. So its some examples: Cash in hand, Cash at Bank Temporary investment, Trade Creditors, bills receivable and Store. So advance payment is known as Current Assets.
  4. Fictitious Assets:- These are assets which are not represented by Possession and Property. These are types of Expenditure of an unusual nature. Which could not be written off, as Preliminary Expenses, Research and Development Expenditure, heavy Advertisements, Debit balance of Profit and Loss account are Examples of such assets.

Types of Liabilities

Liabilities are a payable amount. Which is paid compulsory to another person in the future. Balance sheet format

  1. Fixed and Long Term Liabilities:- Fixed Liabilities are those liabilities which are paid on the time of business termination of the business. So such liabilities are not paid in the next accounting period. Long term Loans, Debentures are the example of such Liabilities.
  2. Current Liabilities:- These types of liability are paid out of current assets. Thus, this type of liabilities are payable in the next accounting period. This involves Creditors, Bank overdraft, Bills Payables, Outstanding Expense, Tax Payables and advanced Received.
  3. Contingent Liabilities:- This liability depends upon the happening of certain events. If such events are not incurred correspondingly, liability is not incurred. Example: a clai the business Unit.

Conclusion:- Now anyone can understand the format of the balance sheet by considering all mentioned individual terms. Just you need to consider all items included in this balance sheet format.

You can Consider other important format as following. Balance sheet format

  1. Trading Account format
  2. Profit and Loss Account format

You can refresh your mind by reading funny poetry as per your interest from the given category. Balance sheet format

Balance sheet format
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