Chapter 3 - Balance Sheet

8/18/2019 Chapter 3 - Balance Sheet

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BALANCE SHEETBALANCE SHEET

(Chapter 3)(Chapter 3)


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LEARNING OBJECTIVESLEARNING OBJECTIVES

Introduce the ba!c concept o"Introduce the ba!c concept o"account!n# $ aet% &!ab!&!t' account!n# $ aet% &!ab!&!t'

oner* e+u!t'oner* e+u!t'

out&!ne the tructure o" the ba&anceout&!ne the tructure o" the ba&ance

heet o" a &!,!ted co,pan'heet o" a &!,!ted co,pan'


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LEARNING OBJECTIVESLEARNING OBJECTIVES

out&!ne the a&ternat!-e ba&anceout&!ne the a&ternat!-e ba&ance

heet "or,atheet "or,at

prepare a ba&ance heetprepare a ba&ance heet

account!n# e+uat!onaccount!n# e+uat!on


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BALANCE SHEETBALANCE SHEET

A .nanc!a& tate,ent thatA .nanc!a& tate,ent that

report the aet% &!ab!&!t!e%report the aet% &!ab!&!t!e%and oner* e+u!t' at aand oner* e+u!t' at a

pec!.c datepec!.c date


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ASSETSASSETS

ASSETS are resources owned by ASSETS are resources owned bybusinessbusiness

fxed assetsfxed assetstangible fxed assetstangible fxed assets

intangible assetsintangible assets

fnancial assetsfnancial assets

current assetscurrent assets


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ASSETSASSETS

toc/toc/

debtor (or account rece!-ab&e)debtor (or account rece!-ab&e)

cahcah

prepa',entprepa',ent


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LIABILIT1LIABILIT1

E2!t!n# debt ob&!#at!on uch aE2!t!n# debt ob&!#at!on uch a

current% or hortter,% &!ab!&!t!ecurrent% or hortter,% &!ab!&!t!e

hortter, .nanc!a& debthortter, .nanc!a& debt

trade cred!tor (or account pa'ab&e)trade cred!tor (or account pa'ab&e) accrua&accrua&


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LIABILIT1LIABILIT1

&on#ter, &!ab!&!t!e&on#ter, &!ab!&!t!e

&on#ter, .nanc!a& debt&on#ter, .nanc!a& debt

&on#ter, trade cred!tor (or&on#ter, trade cred!tor (or

account pa'ab&e)account pa'ab&e)

pro-!!onpro-!!on


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O4NER*S E56IT1O4NER*S E56IT1

cap!ta&cap!ta&

hare pre,!u,hare pre,!u,

reta!ned earn!n#reta!ned earn!n#


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The Main Elements OThe Balance Sheet

The Main Elements OThe Balance Sheet


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A Typical HoriontalBalance Sheet !ormat

A Typical HoriontalBalance Sheet !ormat


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A "ertical !ormatBalance Sheet #$%

A "ertical !ormatBalance Sheet #$%


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.2ed aet (7A) 8 current aet (CA).2ed aet (7A) 8 current aet (CA)

9 current &!ab!&!t!e (CL) 9 &on#ter,9 current &!ab!&!t!e (CL) 9 &on#ter,

&!ab!&!t!e (LTL)&!ab!&!t!e (LTL)

:e+u!t' (E):e+u!t' (E)

7A 8 (CA 9 CL) 9 LTL : E7A 8 (CA 9 CL) 9 LTL : E

A "ertical !ormatBalance Sheet #&%

A "ertical !ormatBalance Sheet #&%


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ASSETS : LIABILITIES 8ASSETS : LIABILITIES 8O4NER*S E56IT1O4NER*S E56IT1

BASIC ACCO6NTINGBASIC ACCO6NTING

E56ATIONE56ATION

Chapter 3 - Balance Sheet

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