PPT - Statement of Financial Position (Balance Sheet) | Accountancy and Financial Management - B Com PDF Download

 Page 1


Principle of Accounting
Chapter 2 
Statement of Financial Position
Page 2


Principle of Accounting
Chapter 2 
Statement of Financial Position
Statement of Financial Position
(Balance Sheet)
?
An accounting report that summarizes the 
financial status of a business at a particular 
point in time. 
?
Three main sections of a statement of 
financial position:
?
Assets
?
Liabilities
?
Owner’s equity
Page 3


Principle of Accounting
Chapter 2 
Statement of Financial Position
Statement of Financial Position
(Balance Sheet)
?
An accounting report that summarizes the 
financial status of a business at a particular 
point in time. 
?
Three main sections of a statement of 
financial position:
?
Assets
?
Liabilities
?
Owner’s equity
Statement of Financial Position
?
The accounting equation is the basis of the 
statement of financial position.
?
   Assets  = Liabilities  + Owner’s equity
?
T-form statement of financial position
?
Narrative form statement of financial position
Page 4


Principle of Accounting
Chapter 2 
Statement of Financial Position
Statement of Financial Position
(Balance Sheet)
?
An accounting report that summarizes the 
financial status of a business at a particular 
point in time. 
?
Three main sections of a statement of 
financial position:
?
Assets
?
Liabilities
?
Owner’s equity
Statement of Financial Position
?
The accounting equation is the basis of the 
statement of financial position.
?
   Assets  = Liabilities  + Owner’s equity
?
T-form statement of financial position
?
Narrative form statement of financial position
T-form statement of financial position
City Traders: Statement of financial position as at 30 June 2005
Assets Liabilities
Cash at bank 3 000 Creditors  5 000
Debtors 5 000 Loan                10 000
Stock            20 000  15 000
Office equipment 4 000           Owner’s equity
Vehicle           18 000 Capital –
K. Wilson  35 000
Total equities &  
Total assets         $50 000  liabilities            $50 000
Page 5


Principle of Accounting
Chapter 2 
Statement of Financial Position
Statement of Financial Position
(Balance Sheet)
?
An accounting report that summarizes the 
financial status of a business at a particular 
point in time. 
?
Three main sections of a statement of 
financial position:
?
Assets
?
Liabilities
?
Owner’s equity
Statement of Financial Position
?
The accounting equation is the basis of the 
statement of financial position.
?
   Assets  = Liabilities  + Owner’s equity
?
T-form statement of financial position
?
Narrative form statement of financial position
T-form statement of financial position
City Traders: Statement of financial position as at 30 June 2005
Assets Liabilities
Cash at bank 3 000 Creditors  5 000
Debtors 5 000 Loan                10 000
Stock            20 000  15 000
Office equipment 4 000           Owner’s equity
Vehicle           18 000 Capital –
K. Wilson  35 000
Total equities &  
Total assets         $50 000  liabilities            $50 000
Statement of Financial Position
City Traders: Statement of financial position as at 30 June 2005 Narrative 
form
Assets
Cash at bank 3,000
Debtors 5,000
Stock 20,000
Office equipment 4,000
Vehicles 18,000
Total assets $50,000
Liabilities
Creditors 5,000
Loan (due 30/6/07) 10,000 15,000
Owner’s equity
Capital – K. Wilson 35,000
Total equities $50,000