1. The Balance Sheet

2. The Balance Sheet is:
a financial statement showing the financial position of a person, business, or other organization on a specific date; usually prepared at the end of the accounting/fiscal period

3. Example:
Company Name
Financial Statement Name
Date
(own)
(owned)
Listed in order of liquidity (from cash to things that take longer to sell)
Alpha Order
Alpha Order

4. Important Features: A=L+OE:
set up in the form of the accounting equation where assets are listed on the left side and liabilities and owner’s equity appear on the right side (account form)
ASSETS:
things that you own that have a dollar value
Accounts Receivable:
--money owed by customers (debtors)  
Accounts Payable:
--money owed by the business (creditors)

5. LIABILITIES:
debts owed
 OWNER’S EQUITY
owner investment (capital) or net worth;
assets – liabilities
WHO? the name of the business
WHAT? the name of the financial statement
WHEN? the date on which the financial position is determined

6. CLAIMS AGAINST ASSETS:
LIQUIDITY:
the order in which assets are converted into cash (ie. cash is usually considered the most liquid and is listed first)
CLAIMS AGAINST ASSETS:
the order in which assets are sold when a business closes operations in order to pay liabilities; bank is paid first, then accounts payable, and the owner receives any remaining money; however, the owner also has to accept any losses that might result from selling off the assets

7. FULL DISCLOSURE: TOTALS:
the financial details of any item are fully disclosed on a balance sheet; record assets at cost value
TOTALS:
the two final totals, one on each side of the balance sheet, should equal and are recorded on the same line and underlined with a double line

8. Sample Balance Sheet
Prepare a balance sheet for pacific trucking as at June 30, using the following information
Accounts Payable – Dini Bros $1,516
Accounts Receivable – W. Caruso
Equipment ,174
Bank Loan ,000
Cash ,265
Supplies ,465
Accounts Payable – Packham Supply 3,946
Trucks ,075
Accounts Receivable – R. Van Loon
B. Rissien, Capital $$$$$$

11. Answer Exercise # 1, 2, 3 p. 28-29 (t), p. 9, 10 (w)
Homework:
Answer Exercise # 1, 2, 3 p (t), p. 9, 10 (w)