The document discusses a session at Amity International Business School about balance sheets. It defines a balance sheet as a statement of assets and liabilities of a business at a given date. It notes that a balance sheet shows the nature and value of assets and liabilities, and can be used to determine the financial solvency of a business by seeing if assets exceed liabilities. The document also outlines some key characteristics of balance sheets and why they are prepared.

1. Amity International Business School
AIBS
MIB, Semester 1
Accounting and Finance
Navneet Saxena

2. Objective Amity International Business School
• In this session we will learn about
– Balance Sheet

3. Balance Sheet Amity International Business School
• A Balance Sheet is one of the financial
statements
• A Balance Sheet is a statement of assets and
liabilities of an enterprise at a given date
• It is called a Balance Sheet because it is a sheet
of balances of those ledger accounts which have
not been closed till the preparation of the
Trading and Profit and Loss Account

4. Characteristics
Amity International Business School
• A Balance Sheet is only a statement and
not an account
• It has no debit side or credit side
• The headings of the two sides are Assets
and Liabilities
• A Balance Sheet is prepared at a
particular point of time and not for a
particular period

5. Characteristics Amity International Business School
• The information contained in a Balance Sheet is
true only at the particular point of time at which it
is prepared
• A Balance Sheet is a summary of balances of
those ledger accounts which have not been
closed by transfer to the Trading and Profit and
Loss Account
• A Balance Sheet shows the nature and value of
assets and the nature and the amount of
liabilities at a given date

6. Need for PreparationAmity International Business School
of Balance Sheet
• To ascertain the nature and value of
assets of a business
• To ascertain the nature and amount of
liabilities of a business
• To find out the financial solvency of an
enterprise
– An enterprise is considered to be solvent if its
assets exceed its external liabilities

7. Contents of Amity International Business School
Balance Sheet
• Assets
– Current Assets
– Investments
– Fixed Assets
• Tangible Fixed Assets
• Intangible Fixed Assets

8. Contents of Amity International Business School
Balance Sheet
• Liabilities Side
– Liabilities
• Current Liability
• Long-term Liability
– Capital

9. Grouping and Marshalling
Amity International Business School
of Assets and Liabilities
• Grouping – putting together items of a
similar nature under a common heading
• Marshalling – order in which the various
assets and liabilities are shown in the
Balance Sheet
• The assets and liabilities can be shown
either in the
– Order of liquidity
– Order of permanency

10. Amity International Business School

11. Recap Amity International Business School
• In this session we learnt about
– Balance Sheet

12. Next Session Amity International Business School
• In the next session we will learn about
– Final Accounts