Balance Sheet
Here we will discuss, what is balance sheet and its importance.
What is a Balance Sheet?
A Balance Sheet refers to a financial statement that reports a company's assets, liabilities, and shareholder equity at a specific point in time.
Parameters
The Balance sheet provides the overall insight into the business. We will go through some of the parameters of the balance sheet here.
Current Assets - Items owned by your business that will be converted into cash within a year. Examples include
Cash - includes hard currency, amount in bank accounts owned by business.
Accounts Receivables - these are short-term payments owed to your business, for example, outstanding invoices.
Inventory - Any business that sell physical products. It includes raw materials, in-progress products and finished products.
Non-Current Assets - These are assets that can’t be converted to cash easily and won’t be converted within the next year. It includes both tangible and intangible assets.
Tangible Assets - Includes assets such as Land, property, machinery, and equipments like computers and printers
Intangible Assets - These aren’t physical by nature and include goodwill, copyrights and patents.
Current Liabilities - These are short-term liabilities that must be paid within the next year.
Account Payable - These are short term payments that the business owes to someone else.
Tax Payable
Non-Current Liabilities - These include debts, loans and other financial obligations due in more than a year from the date reported on the balance sheet.
Shareholder's Equity - It refers to a business’s total net worth.
Owner's Capital - It includes the initial sum of money an owner invests in the company
Retained Earnings - Net earning of the business.
The Balance Sheet is automatically prepared by Veepan, based on
Sales Entry
Purchase Entry
Asset & Expense Entry
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