Preparation of Balance Sheet (Format)

1. Vertical Format (Balance Sheet as per Schedule III of Companies Act, 2013):

2. Horizontal Format:

The Balance Sheet is the statement showing the business’s financial position at a given time. It is the statement showing the value of assets and liabilities of a firm at a certain date. The Balance Sheet shows the report of the property owned by the enterprise and the claims of the creditors and owners against these properties. The total of both sides (i.e., assets and liabilities) of the balance sheet should be equal.

The financial position of a firm is shown by its assets and liabilities on the given date. A company is financially stable when the assets are more than the liabilities, and it represents capital. The Balance Sheet is prepared from the Real Accounts and Personal Accounts. Ledger accounts that have not been closed having debit balances are shown on the assets side and those having credit balances are shown on the liabilities side.

“A Balance Sheet is a screen picture of financial position of a going business at a certain moment.” –Francis R. Stead

Assets = Liabilities + Capital