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Question
Why is a Balance Sheet prepared?
Solution
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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RELATED QUESTIONS
What is a Balance Sheet?
It is a financial statement which sets out the assets and liabilities of a trading or non-trading organisation as on a certain date.
______ is not an account but only a statement of assets and liabilities.
The excess of assets over liabilities represents the ______ of the owner.
It helps the investor to know the earning capacity and financial health of the firm.
______ is a financial statement which sets out assets and liabilities as on a certain date.
It is always prepared on a particular date.
______ shows the financial position of the organization.
"A trading account reveals the financial position of an organisation." Comment.
Balance sheet is an Account. Justify.
