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Question
Write any two uses of the Balance Sheet?
Short Note
Solution
Uses:
- It discloses the organization's liabilities.
- It depicts the company's financial situation.
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Balance Sheet
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RELATED QUESTIONS
What is a Balance Sheet?
Explain five uses of Balance Sheet.
The excess of assets over liabilities represents the ______ of the owner.
Why is a Balance Sheet prepared?
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 a statement of assets and liabilities. It is prepared to judge the financial position on a particular date.
It is always prepared on a particular date.
"A trading account reveals the financial position of an organisation." Comment.
State any two uses of Balance Sheet.
Write a short note on Role of Balance Sheet in decision making.
