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Rules of Preparation of Balance Sheet

In: Business and Management

Submitted By salahuddin260
Words 1054
Pages 5
Rules of Preparation of Balance Sheet
A balance sheet allows you to see at a glance what your company’s assets and liabilities are. The balance sheet is basically a summary of what you own and what you owe. Assets, liabilities and owner’s capital are listed as of a certain date, usually at the end of a month, quarter or fiscal year. Your balance sheet gives you a way to determine the value of your business at any particular time. 1. * Preparation of balance sheet of company is very necessary, because Indian Company law 1956 gives strict instruction about the format of balance sheet of a company. A company can make balance sheet according to the form given in Part I of schedule VI of company law 1956. A company can also make balance sheet summary form, but it has to attach its schedule in which explanation of different components are given. We are explaining different components of balance sheet of company which will be helpful for students to prepare balance sheet of company.
[* Remember the form of balance sheet under Section 211]
You should remember balance sheet and its all components thoroughly. It can be made either horizontal or vertical form. But total of assets should be equal to total of liabilities. Here, I am explaining these components.
Assets Side of Balance Sheet 1. * Assets are written in right side of company’s balance sheet. In these assets, we include.
1. * 1. Fixed Assets
We will show all fixed assets which are purchased and used in business. This is the long term expenditure of company. In these assets, we will include following.
I) Land
II) Building
III) Plant and Machinery
IV) Furniture and Fixture
V) Leasehold assets
VI) Development of property
VII) Vehicles
VIII) Live...

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