Preparing The Balance Sheet Flashcards
What is the date on a balance sheet like?
The balance sheet represents a single point in time
In a balance sheet what’s on the left/right?
Assets on the left
Liabilities & shareholders equity on the right
How are assets listed?
In order of liquidity
What are examples of current assets?
Cash
Accounts receivable
Supplies
What are examples of long term assets?
PPE (property, plant, equipment)
Equipment
Buildings
What is the order of liquidity?
Current assets first
Long term assets second
How are liabilities listed?
Current liabilities first
Long term liabilities second
What are examples of current liabilities?
Accounts payable
Wages payable
What’s an example of long term liabilities?
Bank loans
What are the two shareholders equity accounts?
Common shares
Retained earnings
What is the accounting equation?
Assets = liabilities + equity
This will show whether the balance sheet has been done correctly
