Balance Sheet In Accounting

                                          Balance Sheet

Balance sheet is a list of accounts having debit balance or credit balance in the Ledger. On one side it shows the accounts that have a debit balance and on the other side the accounts have credit balance. The purpose of  balance sheet is to show a true and fair financial position of a business at a particular date. Every business prepares a balance sheet at the end of the accounting year.  

                           Definition Of Balance Sheet

      "It is a statement of asses, liabilities and owner's

 equity(capital) on a particular date.

 "It is a statement where all the ledger accounts balance which remain open after the preparation of Trading Profit and Loss

account, final place."

balance sheet is so-called because it is prepared with the closing balances of ledger accounts at the end of the year. It has two sides -- assets side or left-hand side and liabilities side or right-hand side. The accounts have a debit balance are shown on the asset side and those have credit balance are shown on the liabilities side and the total of the two sides will agree.

 Assets:

              Assets means all the things and properties under the ownership of the business i.e building, plant, furniture, machinery, stock, cash etc. Assets also include any thing against which money or service will be receive i.e debtors, accrued income, prepaid expenses etc.

Liabilities:

              Liabilities means our dues to others or anything against which we are to pay money or render services, i.e. creditors, outstanding expenses, amount payable to the owner of the business (capital) etc.