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Question
The main use(s) of a Balance Sheet for a non-trading organisation is/are ______.
Options
Balance Sheet shows the assets owned by a non-trading organisation.
It reveals the liabilities of the organisation.
It shows the financial position of the organisation.
All of these
Solution
The main use(s) of a Balance Sheet for a non-trading organisation are Balance Sheet shows the assets owned by a non-trading organisation, It reveals the liabilities of the organisation, It shows the financial position of the organisation.
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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.
It helps the investor to know the earning capacity and financial health of the firm.
Why is a Balance Sheet prepared?
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.
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.
Which of the following is not a feature of Balance Sheet?
Balance sheet is an Account. Justify.
