Balance Sheet

You better know what accounts go on the Balance

Sheet by the point in the course!

The Balance Sheet

Assets Anything the Business Owns Order of Liquidity Liabilities Anything the Business Owes Promise of Money Maturity Date Owners Equity Beginning Capital Add: Net Income Less: Drawings and/or Net Loss Ending Capital

The Account Form Balance Sheet

The Classified Balance Sheet

Now that you are used to it...

LETS CHANGE IT!!

The Classified Balance Sheet

Is a lot more specific than the balance sheet you are

used to We are now grouping accounts within our main categories

Assets & Liabilities more specifically

Different categories allow us to dive into the numbers

and compare similar items

ASSETS
Assets are broken down into two categories
1.

Current Assets

Assets that are smaller and easy to turn into cash within the year Cash, Accounts Receivable, Supplies, Inventory

2. Fixed Assets Sometimes called Plant & Equipment Long term assets used in making goods or providing services Large items: Equipment, Car, Building, Land

LIABILITIES
Very similar to assets
Broken into two groups 1.

Current Liabilities

Debts to be paid off within the year Accounts Payable, Bank Loan, HST Payable/Recoverable

2. Long-Term Liabilities Debts to be paid off in over a year Mortgage, Long-Term Bank Loan

Owners Equity
What we have already learned Beginning Balance Net Income/Loss Drawings New Balance

Analyzing Numbers
A number that stakeholders like to know is called

working capital
The amount of money that the company should have to

work with on a short term basis The higher the better Indicates how easily the business can pay off its debts

Current Assets Current Liabilities

The Classified Balance Sheet

We are no longer going to put our balance sheet into

Left Side and Right Side

This was to teach you the difference between Debit

Accounts and Credit Accounts

We will be listing ours from top to bottom Kind of like the income statement There will be one column for the accounts There will be two columns for the numbers

PTs PIZZA Balance Sheet October 31, 2013

The Asset Section

Assets Current Assets Cash Accounts Receivable Total Current Assets Fixed Assets Equipment Automobile Building Land Total Fixed Assets Total Assets xx xx xx

xx xx xx xx xx xx

The Liabilities Section

Liabilities Current Liabilities Accounts Payable HST Payable HST Recoverable Total Current Liabilities
Long-Term Liabilities Bank Loan Mortgage Payable Total Long-Term Liabilities Total Liabilities xx xx (xx)

xx

xx xx xx xx

The Owners Equity Section

Owners Equity D. Fense, Capital Oct. 31 Add: Net Income Less: D. Fense, Drawings D. Fense, Capital Nov. 30
$1400 ($950) $450 $45450 $45000

Put it all together...

PAGE 180 IN YOUR TEXT

Homework
Pg 182 #4,5 Prepare the Balance Sheet on Page 193 in an excel

spreadsheet