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Question
It helps the investor to know the earning capacity and financial health of the firm.
Options
Trading Account
Profit and loss account
Balance sheet
Manufacturing account
Solution
Balance sheet
Explanation:
- Understanding a company’s balance sheet is crucial for assessing its financial health and making informed decisions.
- It shows the financial position of a concern on a particular date to the owners as well as to outsiders.
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RELATED QUESTIONS
What is a Balance Sheet?
Write any two uses of the Balance Sheet?
What are the features of a Balance Sheet?
A ______ is a statement of assets and liabilities at the end of the period. It shows the financial position of a business on a certain date and represents the third and final stage.
______ is a financial statement which sets out assets and liabilities as on a certain date.
The following trial balance was extracted from the books of A. Harding, as on 31st March, 2019:
| Debit (₹) | Credit (₹) | |
| Capital | 20,100 | |
| Drawings | 1,500 | |
| Cash in Hand and at bank | 1,400 | |
| Petty Cash | 100 | |
| Cash Purchases and Sales | 10,000 | 20,000 |
| Credit Purchases and Sales | 12,000 | 25,000 |
| Returns | 2,000 | 1,000 |
| Discount | 400 | |
| Carriage Inwards | 500 | |
| Salaries | 6,000 | |
| Sundry and Petty Expenses | 1,200 | |
| Opening Stock | 5,000 | |
| Bad Debts | 600 | |
| Rent | 1,500 | |
| Machinery | 36,000 | |
| Furniture | 5,000 | |
| Debtors and Creditors | 5,000 | 10,000 |
| Stationary | 2,500 | |
| Commission | 200 | |
| Bank Loan | 14,400 | |
| 90,700 | 90,700 |
Prepare the complete set of final accounts for Mr. A. Harding, after incorporating the following adjustment:
- Closing stock is ₹ 26,000.
It is not an account but a statement.
______ shows the financial position of the organization.
State any two uses of Balance Sheet.
Receipts and payments account serves as the basis for preparing the balance sheet of non-trading organisation.
