Features Of Balance Sheet In Accounting

                                Features Of Balance Sheet

Assets side of the balance sheet indicates the diffentent types of assets owned by a concern, while liabilities side discloses the various sourses through which funds have been obtained in order to acquire those assets. Balance sheet reveals the financial position of a concern on a particular date at a point of time, so it is called "position statement". It is prepared on the last day of an accounting year and discloses the financial position of the business only for that day. It is important to know that the financial position of a concern for the whole year cannot be determined through the Balance Sheet because financial position is ever changing. That is why the heading of balance sheet is given as under:

                       Balance Sheet As At 31st December, 2006

                          (If accounting year ends on 31.12.2005) 

 

Features :

Balance Sheet has the following features:

1. It is the last stage of Final Accounts.

2. It is prepared on the last day of an accounting year.

3. It is not an account under the Double Entry System-- it is a statement only. 

4. It has two sides -- left hand side known as Asst side and right-hand side known as liabilities side.

5. The totals of both sides are always equal. 

6. It discloses the financial condition and solvancy of the business.