1. The Balance Sheet

2. Assets, liabilities and equity—what are they?1.
Review
Assets, liabilities and equity—what are they?

3. Balance Sheet
The balance sheet includes assets, liabilities and owner’s equity.
The balance sheet shows the financial position of a business.
Three other names for owner’s equity:
equity, capital, and net worth

4. Balance Sheet Asset is something you own.
Liability is something you owe.
Equity is the difference between assets and liabilities.

5. Two New Terms Accounts Receivable
Money owed by debtors (customers who owe debts)
Customers promise to pay the money back later
Asset or Liability
Accounts Payable
Money owed by the business to creditors (suppliers who sold products on credit)
Business promises to pay the money back later.
Asset or Liability

6. Let’s see where we are at!
(a.k.a., Kahoot time)

7. The key is attention to detail.1.
Balance Sheet
The key is attention to detail.

8. Step 1: Write in the statement heading.
The heading must indicate:
The name of the business
The name of the statement
The date of the statement

9. Step 1: Write in the statement heading.

10. Step 2: Assets
Circle all assets on the List of Assets and Liabilities for Easy Rent-Alls.
Order them by liquidity.
Write in the sub-heading “Assets” at the top of the left-side column.
Underline the sub-heading.
List the assets.

11. Step 2: Assets.

12. Step 3: Liabilities
Underline all liabilities on the List of Assets and Liabilities for Easy Rent-Alls.
Order them by urgency.
Write in the sub-heading “Liabilities” at the top of the right-side column.
Underline the sub-heading.
List the liabilities.
Write in “Total Liabilities” and the total.

13. Step 3: Liabilities.

14. Step 4: Owner’s Equity
Write in the sub-heading “Owner’s Equity” below “Total Liabilities.”
Underline the sub-heading.
Write in the owner’s name plu the word “Capital.”
Calculate the equity.
Write in the equity.

15. Step 4: Owner’s Equity.

16. Step 5: Totals
Below Assets column, write in “Total Assets” and the total.
Below Liabilities and Equity column, write in “Total Liabilities and Equity” and the total.
Intuitively, they should be the SAME.
A = L + OE

17. Step 5: Totals.

18. Step 6: The Final Touch
Place $ (dollar sign) for the first and the last numbers of each column.
Review the balance sheet for accuracy and compliance with recordkeeping rules (lines, numbers, etc.)

19. Step 6: The Final Touch.

20. The checklist

21. 2.
Be the Accountant
It is now your turn!

22. Prepare a balance sheet
Prepare a balance sheet for the list of assets and liabilities given to you.
Make sure to check with the checklist.
Staple the checklist.
Submit the balance sheet at the beginning of class TOMORROW.