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Balance Sheet
24 Minute Accounting

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Module 1 | 24 minute Accounting | |
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Unit 1 | 24 Minute Accounting Pretest | |
Unit 2 | 24 minute Accounting Course Overview | |
Unit 3 | Accounting Department Structure | |
Unit 4 | Which Accounting System to Use? | |
Unit 5 | Accounting Concepts | |
Unit 6 | Double Entry Principle | |
Unit 7 | Accounting Cycle | |
Unit 8 | Chart of Accounts | |
Unit 9 | Recognition of Revenue | |
Unit 10 | Accounting for Inventories | |
Unit 11 | Accounting for Fixed Assets | |
Unit 12 | Income Statement | |
Unit 13 | Balance Sheet | |
Unit 14 | Auditing for your Business | |
Unit 15 | 24 minute Accounting Posttest |
Survey Questions
Hi, in this video you will learn about the Balance Sheet.
A Balance Sheet is another important financial Statement that a company produces & you should follow. Put simply, it is a “Snapshot of the business, showing what assets the organization owns and how they are financed, whether with debt (liabilities) or with Equity. Some people may even refer to this as a Statement of Financial Position.
Assets are split into:
Current Assets – are assets that can be converted into cash within the short term (12 months). These include items like cash in the bank, inventories & Accounts Receivables.
Non-Current Assets – are assets that help a business to generate income, such as Equipment, Vehicles, Land, etc.
Liabilities are split into:
Current Liabilities – are debts that need to be paid back within a 12 month period. These include debts to suppliers, short term loans, payments to local municipalities, tax authorities etc.
Non-Current Liabilities – these include long term loans from banks, bonds payable and long-term lease obligations.
Equity / Capital are split into:
Share Capital – funds invested in the business
Retained Earnings – an accumulation of profits (or losses) that have been generated by the business.
There are three (3) main uses of the Balance Sheet.
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To determine if Working Capital is sufficient – Being able to pay off all your short term debt with your current assets will keep your managers and other stakeholders at ease.
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To know the Net Worth of the business – The net worth of a company provides investors and other interested parties with a quick snapshot of a company's financial strength. It represents how much value would remain if the business closed its doors and settled all of its debts.
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To see if the company can sustain future operations – as the economy (& demand for your products and services) go up and down, there should be enough assets to cover your overheads, in riding the wave of low sales.