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what is a balance sheet what are its characterist...

Question:
What is a balance sheet. What are its characteristics?

Answer:

After determination of financial results by preparation of Trading and Profit and Loss account, balance sheet is prepared to record capital liabilities and assets of the business.

Balance sheet is a statement containing ledger balances of Real and Personal accounts. Unlike Trading and Profit and Loss accounts, it is not an account.

Characteristics of balance sheet:

(i) It is always prepared on a particular date.
(ii) The total of both the sides must be equal.
(iii) It shows the financial position of the business.
(iv) It is a statement not an account.
(v) It has no debit and credit side.
(vi) Neither ‘To’ nor ‘By’ are used before the names of the account.

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Popular questions of class 11 Accountancy

Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.

From the above, answer the following :
1. What is the amount of capital with which Mr. Sunrise started business?
2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him?
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
9. What is the total amount of expenses and losses incurred?
10. Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner.

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(e) ..................... users are groups outside the business entity, who uses the information to make decisions about the business entity.
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What is a journal? Give a specimen of journal showing at least five entries.

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Complete the following work sheet:
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(vii) The management of a firm is remarkably incompetent, but the firms accountants can not take this into account while preparing book of accounts because of ________ concept.

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Question:
What is a balance sheet. What are its characteristics?

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Question:
What is a balance sheet. What are its characteristics?