Question

What is a balance sheet? What are its characteristics?

Answer 1

Balance Sheet is a statement prepared to ascertain values of assets and liabilities of a business on a particular date. It is called Balance Sheet as it contain balances of real and personal accounts, which are not closed on a particular date.

Characteristics of Balance Sheet

1. It is a statement of assets and liabilities.

2. The total of Assets side must be equal to Liabilities sides.

3. It is prepared at a particular date.

4. It helps in ascertaining the financial position of the business.