The Balance Sheet and the Statement of Owners Dissertation Example

Category: Accounting
Subcategory: Business
Level: College
Pages: 2
Words: 550
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The Balance Sheet and the Statement of Owners’ Equity Name Institutional Affiliation Q1. Explain the elements of the balance sheet, their purposes, and how to measure them. Response A balance sheet is one of the most critical statements produced at the end of a trading period. It has various entries relating to the financial position of an entity as at the end of the trading period. The elements in a balance sheet can be divided as follows: the assets (both current and long-term), the liabilities (both short-term and long-term) and the owners’ equity. It is used to denote the financial health of an entity at a particular time. The purpose of the entries in a balance sheet differentiates the payables from the receivables and the liabilities from the owners’ equity. The assets entry shows how much properties a business has regarding the current assets and the fixed assets in business while the liabilities tell the stakeholders how much obligations that a business has taken on ...

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