What is the objective of the balance sheet?

Open in App

Solution

The main objective behind preparing a balance sheet is to give invested individuals an idea of the organization’s monetary situation, as well as showing what the organization possesses and owes.

To provide financial information

To reveal the financial position

To calculate ratios

To show the picture of assets and liabilities

To show solvency position

Information about debtors and creditors

Suggest Corrections

Similar questions


Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES 1. Shareholder's Funds
(a) Share Capital		3,50,000	3,00,000
2. Non-Current Liabilities
Long-term Borrowings		1,00,000	2,00,000
3. Current Liabilities :
Trade Payables		1,50,000	1,00,000
Total		6,00,000	6,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets (Tangible)		4,00,000	3,00,000
2. Current Assets
Trade Receivables		2,00,000	3,00,000
Total		6,00,000	6,00,000

Prepare the format of balance sheet and explain the various elements of balance sheet.


Particulars	Note No.	31st March, 2019, (₹)	31st March, 2018, (₹)
I. EQUITY AND LIABILITIES 1. Shareholders' Funds
(a) Share Capital		15,00,000	10,00,000
(b) Reserves and Surplus		10,00,000	10,00,000
2. Non-Current Liabilities
Long-term Borrowings		8,00,000	2,00,000
3. Current Liabilities
(a) Trade Payables		5,00,000	3,00,000
Total		38,00,000	25,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets		25,00,000	15,00,000
(ii) Intangible Assets		5,00,000	5,00,000
2. Current Assets
(a) Trade Receivables		6,00,000	3,50,000
(b) Cash and Cash Equivalents		2,00,000	1,50,000
Total		38,00,000	25,00,000

Join BYJU'S Learning Program