Balance SheetYou better know what accounts go on the

Balance Sheet by the point in the course!

The Balance SheetAssets

Anything the Business OwnsOrder of Liquidity

LiabilitiesAnything the Business OwesPromise of MoneyMaturity Date

Owner’s EquityBeginning Capital – Add: Net Income – Less:

Drawings and/or Net Loss – Ending Capital

The Account Form Balance Sheet

The Classified Balance SheetNow that you are used to it...

LET’S CHANGE IT!!

The Classified Balance SheetIs a lot more specific than the balance sheet

you are used toWe are now grouping accounts within our

main categoriesAssets & Liabilities more specifically

Different categories allow us to dive into the numbers and compare similar items

ASSETSAssets are broken down into two categories

1.Current Assets Assets that are smaller and easy to turn into

cash within the year Cash, Accounts Receivable, Supplies, Inventory

2.Fixed Assets Sometimes called Plant & Equipment Long term assets used in making goods or

providing services Large items: Equipment, Car, Building, Land

LIABILITIESVery similar to assetsBroken into two groups1.Current Liabilities

Debts to be paid off within the year Accounts Payable, Bank Loan, HST

Payable/Recoverable

2.Long-Term Liabilities Debts to be paid off in over a year Mortgage, Long-Term Bank Loan

Owner’s EquityWhat we have already learned

Beginning BalanceNet Income/LossDrawingsNew Balance

Analyzing NumbersA number that stakeholders like to know is

called working capitalThe amount of money that the company should

have to work with on a short term basisThe higher the betterIndicates how easily the business can pay off

its debts

Current Assets – Current Liabilities

The Classified Balance SheetWe are no longer going to put our balance

sheet into Left Side and Right SideThis was to teach you the difference between

Debit Accounts and Credit AccountsWe will be listing ours from top to bottom

Kind of like the income statementThere will be one column for the accountsThere will be two columns for the numbers

PT’s PIZZA

Balance Sheet

October 31, 2013

The Asset SectionAssetsCurrent AssetsCash xxAccounts Receivable xxTotal Current Assets xx

Fixed AssetsEquipment xxAutomobile xxBuilding xxLand xxTotal Fixed Assets xx

Total Assets xx

The Liabilities SectionLiabilitiesCurrent LiabilitiesAccounts Payable xxHST Payable xxHST Recoverable (xx)Total Current Liabilities xx

Long-Term LiabilitiesBank Loan xxMortgage Payable xxTotal Long-Term Liabilities xx

Total Liabilities xx

The Owner’s Equity Section

Owner’s Equity

D. Fense, Capital Oct. 31

$45000

Add: Net Income $1400

Less: D. Fense, Drawings

($950) $450

D. Fense, Capital Nov. 30

$45450

Put it all together...PAGE 180 IN YOUR TEXT

HomeworkPg 182

#4,5Prepare the Balance Sheet on Page 193 in an

excel spreadsheet