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प्रश्न
Why is a Balance Sheet prepared?
उत्तर
The balance sheet was created for the following reasons:
- It displays a company's financial situation on a specific date for both owners and outsiders.
- It enables investors to understand the firm's earning capacity and financial health.
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संबंधित प्रश्न
It helps the investor to know the earning capacity and financial health of the firm.
Distinguish between a Profit and Loss Account and a Balance Sheet.
Mr. Tate's financial position on 1 December, 2018 was as follows:
Stock ₹ 4,460; Debtors ₹ 890; Creditors ₹ 2 400; Cash ₹ 500; and Fixed assets ₹ 3,000.
- Draw up a statement to show his assets, liabilities and capital on 1.12.2018.
- During the month of December, 2018, the following transactions took place; Sold goods for cash ₹ 4.000; sold the balance goods on credit for ₹ 3 000; received ₹ 2 000 from debtors; paid ₹ 900 to creditors; withdrew ₹ 400 for personal use; allowed and accounted a direct payment of ₹ 500 by a debtor to one of the creditors.
Draw up a statement of his financial position at the end of the month of December 2018.
It is a statement of assets and liabilities. It is prepared to judge the financial position on a particular date.
It is not an account but a statement.
______ shows the financial position of the organization.
All membership fees collected by a non-trading concern must be entered in the assets side of the balance sheet. Justify for or against.
Balance sheet is an Account. Justify.
Receipts and payments account serves as the basis for preparing the balance sheet of non-trading organisation.
Write a short note on Role of Balance Sheet in decision making.
