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Balance sheet

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					Balance sheet
Business Studies
Yesterday...
• We got through a lot!
  – Introduction to Expenses, Revenue & Net
    Income
  – A look at the accounts we will be using this
    year
COMMON ACCOUNTS
• Were You Paying Attention
   – Each student will be given a slip of paper
   – Walk to the part of the room that you feel your piece of paper best
     associates with
      • ASSET
      • LIABILITY
      • OWNER’S EQUITY
      • REVENUE
      • EXPENSE
• FIND YOUR FRIENDS!
What is a balance sheet?
• The balance sheet is a financial statement.

• It is a list of all the assets (what the business
  owns) and all the liabilities (what the business
  owes) of a business. It also lists the owner’s
  equity (what the business is worth)
The balance sheet is a financial
“snap shot”
• It lists the assets and
  liabilities of the
  business on a
  particular day.
The Balance Sheet
• Used by many,        • Stakeholders will
  many people all        compare with:
  over the world         – Other businesses
• Must be consistent     – Other industries
  in order to be         – Other Years
  comparable
The Balance Sheet Heading
• Must always be consistent!
• Centred - Printed
• 1) Name of the business
• 2) Title of the financial document:
     Balance Sheet
• 3) The date that the Balance Sheet was
     prepared
The Balance Sheet Heading


            Mustang Market
             Balance Sheet
           December 31, 2011
Balance Sheet
• 2 Columned
  Balance Sheet
  – Assets are listed on    – Liabilities &
    the left                  Owner’s Equity are
                              listed on the right


         A = L + OE        Remember This?
Balance Sheet
ASSETS
• Things “owned” by the business
• Listed On the left side
• Assets are listed in the order of
  liquidity
• Liquidity
    – Describes the ease of
      converting an asset into cash.
• List the following in order of
  liquidity
    – Car, Office Supplies, Equipment,
      Land, Building, Cash, Accounts
      Receivable, Inventory
LIABILITIES
• The amount of money
  that a business owes
  other people and other
  businesses (creditors).
• Listed on the Right
• Listed in the order that the
  payment is due called
  maturity date
Owner’s Equity
• The total worth of
  the business
• Listed on the right
• Assets - Liabilities
The Balance Sheet

• Every balance sheet should be in –
  wait for it.............
The Balance Sheet
• BALANCE!!!!!
• The left side of the balance sheet should
  equal the right side of the balance sheet
• To determine totals we find totals for
  – Total Assets, Total Liabilities, Total Liabilities
    & Owner’s Equity
     The Balance Sheet
                   Who?
                   What?
                   When?

                                                           Listed in
                                                           order in
                                                           which they
Liquidity                                                  are paid.

                                                            Owner’s
                                                            name,
                                                            capital.
             Single
                           Double      Totals are on the
            underline                                       A=L+OE.
                           underline   same line
Let’s Build a Balance Sheet
• We are going to
  use a blank
  template and build
  a template for.....
____________________________________________________________________________________________________________




EXAMPLE
                                              FILL IN THE BLANK
                                              FILL IN THE BLANK
                                              FILL IN THE BLANK

       FILL IN THE BLANKS
HOMEWORK
• Work on and
  complete Balance
  Sheet Questions

				
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posted:8/19/2012
language:English
pages:19