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Friday, April 9, 2010

Balance Sheet

Balance sheet is also known as the statement of assets and liabilities, which shows the financial position of the organization at a given date of accounting period. It is the last part of final accounts to be prepared with the help of trial balance after the preparation of profit and loss account.

According to Freeman,"A balance sheet is an item wise list of assets, liabilities and proprietorship of a business at a certain date."

Features of Balance Sheet:
  1. It shows the financial position of the business on a particular date.
  2. It gives the knowledge of assets and liabilities.
  3. It is a statement but not an account like trading and profit and loss account.
  4. Total figure of assets side is always equal to the total figure of liability side.

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