Question

• What is a Balance Sheet?
• What is the nature of the Balance Sheet? Please give an example by reviewing a Balance Sheet of any corporation and sharing it through the platform. Does the organization have more liability than owner's or stock equity? Does the company Assets show more current assets than long-term assets?

Answer 1

Q-What is a Balance Sheet?

Ans: Balance sheet is a statement of different assets and liabilities and capital or owners' fund of a company or partnership firm or any other organisation as on a particular date or point of time. It delivers a snap of what a company owns and owes, as well as the amount invested by shareholders.

Q-What is the nature of the Balance Sheet?

Ans: 1) Balance sheet is prepared not for a particular period but as on a particular date or time.

2) It is prepared once profit and loss statement or account once done. With out profit or loss statement a balance sheet can not be prepared.

3) Total of assets is always equal to the summation of Owner's fund and liabilities i.e. Asset= Capital + liabilities

4) A balance sheet also defines the different assets under respective group i.e. Fixed assets, current assets etc.

Q-Please give an example by reviewing a Balance Sheet of any corporation and sharing it through the platform.

Liabilities	Amount	Assets	Amount
	In USD		In USD
Capital	90000	Furniture	10000
Reserve and surplus	10000	Pant & machinery	160000
Profit and loss till date	20000	Computers	6000
Secured Loan	210000	Long term Investments	110000
Unsecured loan	5000
Current Liabilities		Current assets
		Receivables	10000
Creditors	2000	Debtors	4000
Bills payable	1000	Cash at bank	40000
Outstanding salary	5000	Cash in hand	3000
Total	343000	Total	343000

Q-Does the organization have more liability than owner's or stock equity?

Ans: Yes the organisation can have more liability that it;s owner's stock equity

Q-Does the company Assets show more current assets than long-term assets?

Ans: Usually long term assets are always higher than current assets reason being, company owner always wants to invest in long term assets instead of short term or current assets. But vice versa also can happen.