BALANCE SHEET

THE BALANCE SHEET

Financial statement are the final product of the accounting process. They provide information onm the financial condition of the company. The balance sheet one type on the financial statement provides a summary of what accompany owns and what is owes on one particular day.

Aseet represent everything of value that is owned by of business, such as property, equitment, and account receible.on the other hand, liatibilitas are the debts that a company owes-for example to supplier and bank. If liatibilitas are subtracted from assets (assets-liatibilitas),the amount remaining is the owners share of a business.this is known as owners or stockholders equity.

One key to under standing the accounting transaction of a business is to understand the realitionship of its assets, liatibilitas and owners equity.this is often represented by the pundamental accounting equition assetsequal liatibilitas plus owners equity.

ASSETS=LIATIBILITIES+OWNERS EQUITY

These tree factorsare expressed in monetary term and therefore are limited to item that can be given monetary value. The accounting equition always remains in balance in other words, one side must equal the other.

The balance sheet expands the accounting equition by providing more information about the assets, liatibilities and owners equity of a company at specific time (for example, on December 31,1993).it is made up of twoo part, the first part list the company assets. And the second part detail liatibilities and owners equity.Aseets are divide into current and fixed assets .Cash, acoount receivable,and inventories and all current assets.property, bildings, and equipment makeup the fixed seets of a company.the liatibilities section of the balance sheet is often devided into creent liatibilities (such as account payabnle and income taxes payable) and long-term liatibilities (such as bonds and long-term notes).

The balance sheet provides a financial picture of a company on particular date, and for these reason it is useful into important areas.internattly the balnce sheet provides manager with financial imformation of the company decision making.externatly, it gives potencial investors data for evaluating the company’s financial position.