Balancing a balance sheet can be a grueling task for most accounting students. Though an integral part of their study, many struggles to score in this area. Is it really that monstrous? Let us look at the problem from an insiderâ€™s view point.
What is a balance sheet?
A balance sheet, in simple terms, refers to a statement of financial position, be it of a sole proprietorship, partnership or a company. It indicates financial health of a concern as on a particular date. It lists assets, liabilities and ownership equity. The difference between assets and liabilities will be the net worth or capital of concerns.
Main components of balance sheet
While solving balance sheet homework answers, a major question to balance both sides. I have seen students tearing their hair out, trying to tally their assets and liabilities. To balance, first, we should understand its components
Common problems faced by students
While learning capacity and aptitude may vary from person to person, there are some concerns which are often raised by most students.
Yes, classifying given items into assets and liabilities can be tricky, especially when number of items is huge. I have heard doubts like â€œhow can you say debt receivable is an asset when you have not actually got it?â€ Classifying as short term and long term also causes trouble. All abstract items are found to distract students. While solving balance sheet homework answers, most stumble in classifying.
The essence of a balance sheet is that both sides should tally.This is because it is prepared based on double entry principles.Â Every transaction is recorded in two different accounts. This helps to cross-check accuracy also. So if it does not match, you panic. For perfect balancing, all items should be on proper sides and correctly calculated. If you have learned your texts properly, you will know where to place figures, and you can get perfect balance sheet homework answers.
Unlike science subjects, accounting questions, especially those related to balance sheets, are very lengthy. There will be a long list of items and transactions for you to manipulate. It gets on the nerves of some students. It takes some effort to understand and analyze given information. Key is to practice lots so that you are thorough with every possibility.
Accounting is all about figures and numbers. If you are interested in an accounting career, learn to love numbers. Balance sheets are not for those who hate numbers.
How to excel in balance sheet homework answers
To become proficient in preparing balance sheets, you need to be good in theories and also practice a lot. Once learned properly, balancing a lengthy question is a cakewalk.
Terms of accountancy are tricky. Learn the proper meaning of terms. For example, sundry debtors would mean the same as accounts receivable for purposes of balance sheet. Be aware of all usages of any term so that you do not get confused in exams.
Learn what all are assets and liabilities. Some you understand with basic common sense. You donâ€™t need to ask anyone to know whether cash in bank is an asset or liability. But some items are tricky like pre-paid expenses which are categorized as assets. Another point to note is to classify short term and long term items. Though both short and long term assets will appear on same side, a wrong classification can diminish marks awarded. There is no way other than learning meticulously.
Gone are the days when text books were your only resource for studying. In todayâ€™s tech-savvy world, there are numerous educational websites which help students in every topic. Help is readily available if you are keen on perfection. These sites offer balance sheet homework answers, which greatly help accountancy students. There are several advantages of taking online help.
Nevertheless, let me add a word of caution here. Before taking online help, make sure that it is a credible site and has a history of completing work in time. Also, check out the quality of previous work done by them. If the site is dependable and has a team of experts working for it, you can go for it and get your work done.
There is no short cut to hard work. Practice lots of sample questions so that you will have in-depth knowledge of every possibility. Take previous question papers from your peers and solve them. More you practice, sharper your concepts will be.
Getting perfect grades in balance sheets is not a difficult task, provided you are willing to work. Once you are a master, thesky is the limit for you.