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).