balance sheet

Examples of balance sheet in the following topics:

• Introduction to the Balance Sheet

  • The balance sheet is a summary of the financial balances of a company and reflects the company's solvency and financial position.
  • Both internal and external users use the balance sheet.
  • The balance sheet also demonstrates how liquid the business is.
  • Finally, the balance sheet shows the book value of the owners' stake in the business.
  • Name the two types of balance sheets and identify which accounts are listed on the balance sheet

• Being Aware of Off-Balance-Sheet Financing

  • Off-Balance-Sheet-Financing represents rights to use assets or obligations that are not reported on balance sheets to pay liabilities.
  • Off-Balance-Sheet-Financing is associated with debt that is not reported on a company's balance sheet.
  • The formal accounting distinctions between on and off-balance sheet items can be complicated and are subject to some level of management judgment.
  • An example of off-balance-sheet financing is an unconsolidated subsidiary.
  • Jeffrey Skilling is the former CEO of Enron, which was notorious for it's use of off-balance-sheet-financing.

• Reporting Cash

  • Cash and cash equivalents are reported in the current asset section of a business's balance sheet.
  • Cash is an asset, which means it is included in a business's balance sheet .
  • When the company's cash balance is reported on its balance sheet, all of those accounts are combined into one "cash" line item.
  • A sample balance sheet in Chinese.
  • Cash and cash equivalents are reported on the balance sheet.

• What Goes on the Balances Sheet and What Goes in the Notes

  • The balance sheet lists current liability accounts and their balances; the notes provide explanations for the balances, which are sometimes required.
  • Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a company's calendar year.
  • Balance sheets are presented with assets in one section, and liabilities and equity in the other section, so that the two sections "balance. " The fundamental accounting equation is: assets = liabilities + equity ([).
  • Current liabilities and their account balances as of the date on the balance sheet are presented first, in order by due date.
  • Explain why a company would use a note to the balance sheet

• Relationships Between Statements

  • The income statement, specifically, net income reconciles the beginning (prior ending period) balance sheet to the current balance sheet.
  • The statement of shareholder's equity connects the income statement and the balance sheet.
  • The statement of shareholder's equity explains the changes in retained earnings between two balance sheet dates.
  • A clean surplus occurs when all changes in the balance sheet are reconciled by the income statement.
  • That is, the net change in the balance sheet accounts will not equal net income.

• Reporting Current Liabilities

  • Current liabilities are reported first in the liability section of the balance sheet because they have first claim on company assets.
  • The presentation of the balance sheet should support the accounting equation of assets = liabilities + owner's equity.
  • For many companies, accounts payable is the first balance sheet account listed in the current liabilities section.
  • Therefore, late payments are not disclosed on the balance sheet for accounts payable.
  • Current liabilities is the first section reported under liabilities on the balance sheet.

• Reporting Receivables

  • Accounts receivable are reported as a line item on the balance sheet and in a more detailed again report.
  • Accounts receivable are reported as a line item on the balance sheet.

• Resource Cost Write-Off

  • The term write-off describes removing an asset whose value is zero and is no longer in use from the balance sheet.
  • An asset is written off the balance sheet by recording a journal entry.
  • The decrease in the asset and accumulated depletion accounts reduces the balance to zero and removes the account from the balance sheet.
  • The asset's balance is reduced by the impairment amount to reflect the asset's new economic value and the account remains on the balance sheet.
  • An asset write-off removes an asset's cost off the balance sheet and expenses it on the income statement.

• Reporting Inventories

  • Inventory is an asset and its ending balance should be reported as a current asset on the balance sheet.
  • Inventory is an asset and its ending balance should be reported as a current asset on the balance sheet.

• The Post-Closing Trial Balance

  • A post-closing trial balance is a trial balance taken after the closing entries have been posted.
  • The permanent balance sheet accounts will appear on the post-closing trial balance with their balances.
  • When the post-closing trial balance is run, the zero balance temporary accounts will not appear.
  • As with the trial balance, the purpose of the post-closing trial balance is to ensure that debits equal credits.
  • The post-closing trial balance differs from the adjusted trial balance in only two important respects: It excludes all temporary accounts since they have been closed, and it updates the retained earnings account to its proper ending balance.