Important Features of the Balance Sheet

1
Important Features of the Balance Sheet

1. Assets Liabilities Owners Equity
2. 3 line heading is used that tells the reader
   WHO, WHAT, WHEN
3. Assets are in order of liquidity (the order in
   which assets can be changed into cash). Cash is
   always first (or Bank), then Accounts
   Receivables, then Supplies, then Machines,
   Equipment, Land and Building.
4. The liabilities are listed in the order that they
   must be paid back.

2

1. When showing the values for land, building, or
   equipment, always show the full Fair Market
   Value, even if the assets hasnt yet been paid
   for fully. The payable on that asset will be
   shown in the liability section.
2. The final totals (Assets, and Liabilities
   Equity) are underlined with a double line.