A Balance Sheet is an overview of the financial state of your business at any given time period. Your Balance Sheet can differ at any given time, day to day or month to month and so on.
The information on your Balance Sheet can be extracted from your companys General Ledgers.
The General Ledger is a means to collect data related to you assets fixed and liabilities, revenues expense, gains and losses. This information is then added to your Balance Sheet. It is used if your company uses the double entry bookkeeping method of accounting. The Balance Sheet includes assets, liabilities and equities. Assets are the items your business owns, the liabilities are the items your business doesn't own and equities are the item stocks and owners equity.
Assets = Liabilities + Owner's Equity
The first thing you will need to prepare a balance sheet is a computer with a word pressing or a spread sheet program on it.
Second you will need to divide the worksheet into three parts with one section on the top and the other two sections below the top section,
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Third in the top section add the company name the title of the Balance Sheet and also add the time period of the balance sheet.
Forth, in the asset section add all of you companies assets which should include items like, long term investment, fixed assets, equipment, current assets, and petty cash and so on.
Fifth, in the Liabilities section add all of your companies liabilities which should include items like, interest payable, notes payable, federal income taxes, state income taxes and so on. Your equalities should be added in this section.
Sixth add all of the assets and also add all of the liabilities and equities. This is your total assets and also your total liabilities. If they are not equal add a line item called net profit. Write that amount down on that line. On the last line assets should equal liabilities and the equalities.
If your liabilities are less than your assets, you will have a net profit. But on the other hand if your assets are less then your liabilities you have a net loss.
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