Balance Sheets Unit 1

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Balance Sheets

A balance sheet shows what a business owns or what is owed to a business.

What belongs to the business: Assets
What the business owes: Liabilities

Liabilties + Capital (money invested) = Assets

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Non-Current and Current Assets

Non-Current Assets:

  • Premises
  • Shop Fittings
  • Fixtures
  • Motor Vehicles
  • Equipment
  • Machinery
  • Provsion for Depreciation

Current Assets:

  • Closing Inventory
  • Trade Recievables
  • Bank
  • Prepayments
  • Cash
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Non-Current and Current Liabilities

Non-Current Liabilities:

  • Mortgage
  • Bad Debt
  • Loan

Current Liabilities:

  • Trade Payables
  • Accruals
  • Bank Overdraft
  • Net Current Assets
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Layout of Balance Sheets

Non-Current Assets

Current Assets

Current Liabilities

Non-Current Liabilities

Financed By:

  • Opening Capital
  • Add profit for the year
  • Less Drawings
  • Closing Capital
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Income Statements

Revenue
Returns Inwards

Cost of Sales

  • Opening Inventory
  • Add Purchases
  • Add Carriage Inwards
  • Less Returns Outwards
  • Add Discount Recieved
  • Drawings of Inventory

Less Closing Inventory
Gross Profit

Less Expenses:

  • Discount Allowed
  • Depreciation
  • Motor Expenses
  • Rent and Rates
  • Wages

Net Profit for the year

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Trial Balance

Trial Balance: A statement of all debits and credits in a double-entry account book, with any disagreement indicating an error.

Debit
Expenses
Assets
Drawings
Credit
Liabilties
Income
Capital

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