Question

What are the features of a Balance Sheet?

Explain the features of Balance Sheet.

List any two/three features of a Balance Sheet.

State the main features of a Balance Sheet.

Answer 1

The features of a Balance sheet are as follows:

1. A balance sheet is prepared for a certain date rather than a specific time.
2. It shows the kind and worth of liabilities and assets as well as the capital position on a specific date.
3. It is not an account under the double entry system - it is a statement only.
4. It is prepared following the creation of the Trading and Profit & Loss Account or the Income and Expenditure Account.
5. It can be prepared, taking into consideration the debit and credit balances of the real and personal accounts, as her trial balance, wherein the real account's debit balance is an indicator of the asset of a firm, while the credit balance of the personal account is an indicator of liability.
6. The equation Assets = Liabilities + Capital must equal the sum of the two sides of the balance sheet, or the assets and liabilities. If not, something is obviously wrong. 
7. It makes the company's solvency and financial situation public.