Balance Shet: - JSS3 Business studies Lesson Note
The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It presents the company's assets, liabilities, and shareholders' equity, showing how resources are financed and used.
Example of a Balance Sheet:
|
Particulars |
Amount (₦)
Assets
Current Assets
XXXX
Fixed Assets
XXXX
Total Assets
XXXX
Liabilities
Current Liabilities
(XXXX)
Long-term Liabilities
(XXXX)
Total Liabilities
(XXXX)
Shareholders' Equity
XXXX
Total Liabilities and Shareholders' Equity
XXXX
Explanation:
- Assets: These are resources owned or controlled by the company, which can be either current assets (like cash, inventory) or fixed assets (like property, plant, and equipment).
- Liabilities: These represent the company's obligations or debts, which can be either current liabilities (like accounts payable) or long-term liabilities (like bank loans).
- Shareholders' Equity: This represents the residual interest in the assets of the company after deducting liabilities. It includes items like retained earnings and contributed capital.
- Total Liabilities and Shareholders' Equity: This represents the total financing of the company's assets, showing that the company's resources are either financed by debt (liabilities) or equity (shareholders' equity).