Points to Be Considered Before Creating Balance Sheet

Need help with your homework? Look no further! Our subject experts are ready to effortlessly handle your assignments, so you can finally say goodbye to stress and hello to top grades.

Please enable JavaScript in your browser to complete this form.
Click or drag files to this area to upload. You can upload up to 3 files.
Get a response in under 15 min

There are few points that should be kept in mind before creating a balance sheet:

  • Importance of Trial balance: Before preparing the balance sheet, a firm needs to create the trial balance. All entries in the trial balance will finally tally at the end. Those are recorded in the balance sheet. If the trial balance fails to tally then the excess balance will be written under suspense account then appears to balance sheet. The balance sheet will have all accounts exactly as they are in trial balance i.e. debit and credit entries of trading account, profit and loss account will come in debit and credit sides of the balance sheet.
  • Common entries in balance sheet: There are some common entries that appear in the debit or credit side always, such as:
  1. Direct expenses and indirect expenses appear in trading account and Profit and Loss account. They are tallied in the balance sheet exactly as they were in the first place.
  2. Direct expenses such as factory expenses are written under the debit side of trading account.
  3. Indirect expenses such as office expenditure are written under the debit side of Profit and Loss account.
  4. There are other expenses such as rent, discount or interest that are paid in favor of the production. These are written under the debit side of Profit and Loss account. In other cases, if these amounts are received then they are written under credit side of the Profit and Loss account.

Here is one of the sample Trial Balance and Balance Sheet from the books of Mahinder Singh, prepare Trading and Profit & Loss Ale for the year ending March 31st, 2004 and the Balance sheet as on that date. 

Name of Account                                                                     Debit               Credit

Balances          Balances

Drawing and Capital                                                                          20,000             1, 99,000

Plant & Machinery                                                                              80,000

Debtors & creditors                                                                            70,000             50,000

Purchases and sales                                                                            1, 10,000         2, 20,000

Returns                                                                                                10,000             7,000

Wages                                                                                                  40,000

Cash in hand                                                                                       5,000

Cash at Bank                                                                                       10,000

Salaries                                                                                               30,900

Repairs                                                                                                8,000

Stock                                                                                                    45,000

Rent                                                                                                     10,000

Manufacturing Expenses                                                                     7,000

Bill receivable                                                                                     12,000

Bill Payable                                                                                                                 20,000

Bad debts                                                                                            5,000

Carriage                                                                                              9,000

Furniture                                                                                             15,000

Income tax                                                                                           10,000

4,96,000          4,96,000 

Closing stock was valued at $ 50,000.

Solution.

 

Trading and Profit and Loss Account

Dr.                                                                                                                                           Cr.

Expenses/Losses                      Amount            Revenue/Gain                              Amount

$                                                                      $.

To Opening Stock                   45,000             By Sales 2,20,000

To Purchases   1,10,000                                 Less : Returns 10,000             2, 10,000

Less : Returns 7,000                1,03,000          By Closing stock                     50,000

To Manufacturing Expenses   7,000

To Carriage                             9,000

To Wages                                40,000

To Gross Profit c/d                 56,000

2,60,000                                                          2,60,000

To Salaries                               30,000             By Gross Profit b/d                 56,000

To Repairs                               8,000

To Rent                                   10,000

To Bad debts                          5,000

To Net Profit transferred to Capital A/c 3.000

56,000                                                             56,000

Balance Sheet

Liabilities                                             Amount                        Assets                          Amount

                                                              $                                                                                  $

Capital                                   1,99,000                                  Plant & Machinery                  80,000

Add : Net Profit                     3,000                                    Furniture                                 15,000

  2,02,000                                  Bills receivable                        12,000

 

Less : Drawings           20,000                                     Sundry Debtors                       70,000

1,82,000                                  Closing stock                          50,000

Less : Income tax        10,000             1,72,000          Cash at bank                          10,000

Sundry creditors                                 50,000             Cash in hand                           5,000

Bills payable                                        20,000

2,42,000                                                          2,42,000

Here, one must remember that Drawings, debtors, returns etc. falls under debit side of the trial balance and Capital, creditors and also returns etc. falls under the credit side of the trial balance. These entries are collected from their respected sides only.

 

Links of Previous Main Topic:-

Links of Next Accounting Topics:-

Homework Blues?

Get expert help with homework for all subjects.

  • NPlagiarism-free work
  • NHonest Pricing
  • NMoney-back guarantee

Latest Reviews

Solved Sample Works

Accounting Homework

Corporate Accounting Sample

Biology Homework

Genetics Assignment Sample

Essay Writing Help

Business Plan Sample

Homework Help FAQs

Our Answers to Your Questions

How do I submit my homework?
K
L

Getting homework help is very simple with us. Students can either send us the homework via email or they can upload it to our online form here. For a quicker response, You can also chat with us at WhatsApp and submit homework directly. You are sure to get a response from our side within 10 minutes.

How much will my homework cost?
K
L

The cost of paying someone to do your homework varies depending on the service and the type of assignment. We have listed our standard pricing plans for popularly used writing services. For other kind of assignments, You can get a free instant quote from us using our online form.

We also accept partial payment to start working on your assignment help. You can pay the remaining amount when your task gets completed. No pressure of up-front payment. No hidden order costs.

Can I receive help with my homework anytime?
K
L

Yes, you can receive help with your homework anytime with us. Our online homework help services are available 24/7, allowing you to receive assistance with your homework anytime, anywhere.

For urgent homework requests, reach out to us through our LiveChat or WhatsApp channels and one of our friendly support agents will assist you in finding the right expert for your online homework help request immediately. With our services, you can rely on 24/7 availability and meeting deadlines.

Are online homework websites budget-friendly for students like me?
K
L

Yes, Our Online Homework Help websites are an affordable solution for you as a student. Compared to traditional tutoring services, MyHomeworkHelp prices their homework help services honestly and within the budget of college students. This makes it easier for you to receive assistance with your homework without breaking the bank.

What is your plagiarism-free policy?
K
L

At myhomeworkhelp, we take plagiarism very seriously and ensure that all solutions provided by our tutors are original and authentic. Our tutors are trained to provide custom-made solutions, tailored specifically to meet the requirements of each student. We do not provide pre-written papers. All our homeswork solutions are made from scratch, guaranteeing 100% orignal homework answers.

Additionally, we have strict plagiarism-detection tools in place to check all submissions for authenticity.

Is using an Online Homework Help Service cheating?
K
L

Using online homework help services is not equivalent to cheating. Our services are intended to support students with their homework and provide them with the resources they need to succeed academically. With the help of our online homework help services, students can receive immediate assistance with their homework from any location, at any time.

At myhomeworkhelp, we are committed to promoting academic integrity. Our tutors provide solutions that serve as guides for drafting your own work. It is not acceptable to submit someone else's work as your own, as this constitutes academic plagiarism.

Can I chat with my tutor?
K
L

Using our secure chat board, you can now chat directly with your assigned tutor. The chats are encrypted both ways to secure your privacy. This makes your contact with the tutor directly & confidentially, so you can better explain any requirements or changes if needed or just need updates.

You can't contact the experts outside of chat board platform. Sharing any personal information, including but not limited to contact information, goes against our Terms and Conditions and therefore may result in permanently blocking you from the platform. We take any personal data very seriously and we do it for the safety of our users.

Know more about chat board here.

What is your money-back guarantee policy?
K
L

It’s worth noting that our online homework help service rarely leads to disappointment among students. Our expert tutors, along with our support and quality assurance team, are dedicated to providing the best possible experience for our customers. However, if for any reason a student is unsatisfied with their homework help solution, we offer unlimited revisions until they are fully satisfied.

In the rare event that a student remains unsatisfied even after revisions, we offer a money-back guarantee. We want all of our students to feel confident and secure when they turn to us for assistance with their homework, and this guarantee is just one way that we demonstrate our commitment to providing the best possible service. If you have any concerns about our services or the quality of the work you receive, please contact us for support.

What is the expertise of the tutor assigned to do my homework?
K
L

At myhomeworkhelp, we take pride in our team of qualified and experienced tutors. All of our tutors undergo a rigorous selection process and are required to have a minimum of a master's degree in their respective fields. Additionally, they must pass a series of tests to demonstrate their proficiency and ability to deliver quality work. We believe in transparency and providing our clients with the best possible service. You can be confident in the expertise of the tutor assigned to do your homework.

What about privacy & confidentiality?
K
L

Using My Homework Help is absolutely safe. We care about your security, therefore we encrypt all personal data to make every user feel safe while using our services and we don’t share any personal information with any third parties without your permission. Your credit card information is not stored anywhere at My Homework Help, and use of PayPal relies on their secure payment networks. Your identity, payment and homework are in safe hands. You can always be certain of getting professional help and remaining anonymous, while using My Homework Help.