Sensational Objectives Of Preparing Balance Sheet

The cash or bank balance is arrived at as the balancing figure of the two sides of the balance sheet.

Objectives of preparing balance sheet. Ii To know the position of internal liabilities and external liabilities of the business so that timely arrangement can be made for their payment. The objective of preparing statement of affairs is to estimate the balance in capital account on a particular date. Every business prepares a balance sheet at the end of the account year.

Its objective is to communicate a companys financial aspects to external entities including investors creditors tax officials shareholders etc. Balance Sheet method This method is also useful for preparing long term cash budgets. A balance sheet is also called as a top financial statement.

- To present the actual financial position of the business on a given date. Objectives of Preparing Balance Sheet Balance sheet is prepared to achieve following objectives. The following are some of the key objectives of the balance sheet.

Preparation and presentation of financial statements is also the main objective of accounting. It ensures that all transactions have been recorded with the same debit and credit amounts It makes the preparation of trading profit and loss account and balance sheet easy by making available the balances of all account at single place. It helps in ascertaining the financial position of the business on a given day.

The objective of preparing balance sheet is to show the true financial position of an entity on a particular date. Nature and Value of the assets. 3The other important objective is to ascertain financial performance and financial position.

This article will focus on the features objectives and the three types of Company Financial Reports and their uses. The purpose of a balance sheet is to show a true and fair financial position of a business at a particular date. I To know the financial position of the business.