What are the Primary Components of a Trial Balance Sheet?

What are the Primary Components of a Trial Balance Sheet?

    What is a Trial Balance?

      Journal entries, debits and credits, profit and loss statements, balance sheetswhere does it all end? To be honest, everything either flows into or comes out of the trial balance sheet.

    Think of the components of the trial balance sheet as the heart of your accounting system. Read more

Business Accounting – Brief Overview of How to Read a Balance Sheet

Business Accounting - Brief Overview of How to Read a Balance Sheet

A company’s financial standing is reflected in its balance sheet, which reveals the exact status of the company in the current market conditions. This important document is also referred to as a ‘statement of financial position’ and it summarises many of the important details concerning a company.

If you are planning to invest in a small business or become a shareholder, then it is very important you understand the basics of how to read a balance sheet, because it is this report which contains the vital statistics and the precise details of the financial position of a company. Read more

An Accounting Guide to the Balance Sheet

An Accounting Guide to the Balance Sheet

      When you first decided to become an entrepreneur you most likely thought about your product or service, how you would market it, sell it and make a profit. Once the doors to your business were open, you then discovered you needed to learn all about your finances, including all the ins and outs to financial statements such as the balance sheet.

    A balance sheet doesn’t just contain made-up numbers listed on the asset and liability side, those numbers come from your day-to-day journal entries where everything coming in or going out of your business is tracked.

    Bright Hub takes the mystery out of the balance sheet and offers some great tips, advice and tools you need to be informed on the financial condition of your business.

    Balance Sheet Basics

    They say the balance sheet is a snapshot of your business at any given moment in time. Read more

Balance Sheet Basics – A Beginner’s Guide

Balance Sheet Basics - A Beginner's Guide

Whatever your reasons for looking at a business’ balance sheet, whether you are planning to buy it, invest in it or simply buy a few shares, there is little point in having this incredibly important document in front of you, if don’t have the first idea what you are looking at.

A firm’s balance sheet is like a snap shot of its fiscal status, and will tell you everything you need to know about its current financial health; it contains information on all assets, debts, investments and the net worth of a company and so can provide a far better insight as to how it has been performing than a mere profit report can, pretty useful if you are planning to part with your hard earned cash.

A balance sheet will list a firm’s assets, liabilities and the shareholder’s equity and is based on the simple equation that a firm’s net worth or ‘equity’ must equal its assets minus its liabilities.

The assets on a balance sheet will typically be split into two categories, namely ‘current’ assets and ‘fixed’ assets or less commonly ‘financial’ and ‘non-financial’ assets. Read more

Horizontal Versus Vertical Analysis: Both Together Provides a Larger Picture

Horizontal Versus Vertical Analysis: Both Together Provides a Larger Picture

    When it comes to comparing horizontal analysis versus vertical analysis, one must keep in mind that they are contrasting approaches in financial statement analysis but together they help bring clarity and more impact to some items and relationships that might have been overlooked.

    Vertical Analysis

    Vertical analysis shows each account on financial statement in dollars and as a percentage of another item. Read more

Tips for Preparing a Trial Balance

Tips for Preparing a Trial Balance

    What is a Trial Balance?

    Just when you think you finally understand your income and expense statement and your balance sheet, here comes another accounting tool, the trial balance. Think of the trial balance as the place where every transaction eventually ends up in the form of a debit or credit. Read more

How to Make a Financial Statement

Financial Statements are used to find the financial health of a company or of an individual. Financial statements for companies and firms are usually prepared by Certified Public Accountants (CPAs). It does not hurt to understand what goes into the work for a financial statement to give you a good idea of your company’s financial health. There are four basic statements to be considered, Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of cash flow.

The Balance Sheet also referred to as statement of financial position or condition, reports on Assets (anything of value), liabilities (anything owed to others) and Owner’s equity. Read more

Basic Balance Sheet Example – What is a Balance Sheet?

Basic Balance Sheet Example - What is a Balance Sheet?

    What Is a Balance Sheet?

      My accountant has always told me a balance sheet is a snapshot of my business assets, liabilities, equity, and net worth; and it can change dramatically from time to time. A basic balance sheet example, if completed accurately, will show all your assets, less your liabilities, plus equity . Read more