Chapter 9 Book-keeping Format Proper Balance Sheet
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Book-keeping The Balance sheet
Chapter 9
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007
9-1
No double entry in balance sheet
and and are are stem: ystem:
he debit the the debit and and accounts. accounts.
es es arranged arranged
according according to to whether whether they they are are
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-2
Fixed assets Fixed Fixed assets: assets: •• Were Were not not bought bought primarily primarilyto tobe besold sold
••Are Areto to be beused usedin inthe thebusiness business ••Are Areexpected expectedto tobe be of of use use to tothe thebusiness businessfor for aalong longtime time ••Examples Examplesinclude: include: --Land Landand andbuildings buildings --Fixtures Fixturesand andfittings fittings --Machinery Machinery --Motor Motor vehicle vehicle
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-3
Current assets These These are are listed listed in in increasing increasing order order of of liquidity liquidity starting starting with with the the assets assets furthest furthest away away from from being being turned turned into into cash. cash. For For instance: instance:
1. 1. 2. 2. 3. 3. 4. 4.
Stock Stock Debtors Debtors Cash Cash at at bank bank Cash Cash in in hand hand
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-4
Liabilities There There are are two two categories categories of of liabilities: liabilities: current current liabilities liabilities and and long-term long-term liabilities. liabilities. •• Current Current liabilities liabilities are are items items that that have have to to be be paid paid within within aa year year of of the the balance balance sheet sheet date. date. •• Long-term Long-term liabilities liabilities are are items items that that have have to to be be paid paid more more than than aa year year after after the the balance balance sheet sheet date. date.
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-5
A properly drawn up balance sheet (horizontal format) AA properly properly drawn drawn up up balance balance sheet sheet should should have have five five categories categories of of entries: entries:
Fixed Fixed assets assets Current Current assets assets
Current Current liabilities liabilities Long-term Long-term liabilities liabilities Capital Capital
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-6
A properly drawn up balance sheet (vertical format)
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-7
End of Chapter 9 The Balance sheet
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007
9-8
Chapter 9
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007
9-1
No double entry in balance sheet
and and are are stem: ystem:
he debit the the debit and and accounts. accounts.
es es arranged arranged
according according to to whether whether they they are are
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-2
Fixed assets Fixed Fixed assets: assets: •• Were Were not not bought bought primarily primarilyto tobe besold sold
••Are Areto to be beused usedin inthe thebusiness business ••Are Areexpected expectedto tobe be of of use use to tothe thebusiness businessfor for aalong longtime time ••Examples Examplesinclude: include: --Land Landand andbuildings buildings --Fixtures Fixturesand andfittings fittings --Machinery Machinery --Motor Motor vehicle vehicle
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-3
Current assets These These are are listed listed in in increasing increasing order order of of liquidity liquidity starting starting with with the the assets assets furthest furthest away away from from being being turned turned into into cash. cash. For For instance: instance:
1. 1. 2. 2. 3. 3. 4. 4.
Stock Stock Debtors Debtors Cash Cash at at bank bank Cash Cash in in hand hand
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-4
Liabilities There There are are two two categories categories of of liabilities: liabilities: current current liabilities liabilities and and long-term long-term liabilities. liabilities. •• Current Current liabilities liabilities are are items items that that have have to to be be paid paid within within aa year year of of the the balance balance sheet sheet date. date. •• Long-term Long-term liabilities liabilities are are items items that that have have to to be be paid paid more more than than aa year year after after the the balance balance sheet sheet date. date.
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-5
A properly drawn up balance sheet (horizontal format) AA properly properly drawn drawn up up balance balance sheet sheet should should have have five five categories categories of of entries: entries:
Fixed Fixed assets assets Current Current assets assets
Current Current liabilities liabilities Long-term Long-term liabilities liabilities Capital Capital
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-6
A properly drawn up balance sheet (vertical format)
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma
9-7
End of Chapter 9 The Balance sheet
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007
9-8
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