1. Introduction to Accounting Preparing for a User’s Perspective
What is the Standard Format for a Balance Sheet?
Debits and Credits Trainer
By Kevin C. Kimball, CPA
with support from
Free Jan. 2014
Available on the Google Play Store

2. Comparative: Classified:
As of 12/31/X1
Assets =
Liabilities +
Equity
As of 12/31/X1
As of 12/31/X2
Comparative:
Versus
Classified:
Versus
Current
Short-term
Non-current
Long-term

3. = $70 $40 $30 Assets Liabilities + Equity $70 $40 $20 As of 12/31/X1
Key Concept: All Balance Sheets must Balance AS OF a given point in time.

4. Last Saturday in September
As of 12/31/12
Bank of America
As of 12/31/13
Comparative
Dec. 31
Balance Sheet
Balance Sheet
As of 9/29/12
As of 9/24/11
Comparative
Apple
Last Saturday in September
Balance Sheet
Balance Sheet

5. K S C $1,000 $3,000 $2,000 $3,000 Equity $2,000 Note Payable (@10%)
February 23, X1
$1,000
$3,000 Equity
$1,000
Inventory
(10 $100 each)
$3,000
Kevin, Owner
$2,000 K S C
$2,000 Note Payable
Bank, Lender

6. As of Feb. 23, X1
What assets does KSC have?
How did KSC finance those assets?
Cash $4,000
Note payable $2,000
Equipment $1,000
Equity $3,000
Total assets $5,000
Total liabilities and equity $5,000
It balances !!!

7. If
it’s wrong

8. 1a) Business name
1b) Balance sheet name
1c) Balance sheet date (as of or as at)
3) Classified
2) Balances

9. Classified Balance Sheet – Assets are classified based on their “liquidity”
Cash
Most liquid
Convert to cash within one year
Current Assets
Acct. Rec
Non-current Assets
or Long-term Assets
Convert to cash after one year
Land
Least liquid

10. Classified Balance Sheet – Liabilities are classified based on how quickly cash will be needed to pay off the liabilities
Payment due <= one year
Note Payable
To be paid within one year
Current Liabilities
Liquid
Mortgage
Non-current Liabilities
or Long-term Liabilities
To be paid after one year
Solvent
Payment due > one year

11. Assets
Cash
Accounts receivable
Inventory
Office supplies
Prepaid insurance
Prepaid rent
Notes receivable
Warehouse equipment
Land
Patents
Trademarks
Copyrights
Goodwill
Liabilities
(examples of Debt Financing)
Accounts payable
Salaries and wages payable
Income taxes payable
Dividends payable
Interest payable
Unearned sales revenue
Utilities payable
Notes payable
Mortgages payable
Bonds payable
Equity
(examples of Equity Financing)
Capital stock
Retained Earnings

12. Asset Questions: Why is it an asset?
What potential future benefit will it provide the business that would qualify it to be called an asset? 
What could cause this asset to be used up so that it is no longer an asset and should be expensed?

13. Liability Questions: Why is it a liability?
What did external creditors or lenders give the company, or what happened, that allowed external creditors and lenders to have claim on the company's assets? 
What did the company do in the past that committed it to pay this amount off in the future? 
What will it have to sacrifice in the future to satisfy these claims?

14. Equity Questions: Why is it equity?
How have the owners either contributed resources to the business or earned profits which they have retained in the business to justify their equity claims on the business’ assets?

15. Introduction to Accounting Preparing for a User’s Perspective
What is the Standard Format for a Balance Sheet?
Debits and Credits Trainer
By Kevin C. Kimball, CPA
with support from
Free Jan. 2014
Available on the Google Play Store