Question

"Balance sheet is a statement of assets and liabilities of sources and uses of capital or both."Explain this statement.

Answer 1

balance sheet is a statement showing asset and liabilities of an entity. in the liability side it shows its liabilities from different sources of fund such as equity fund long term debt or current liabilities.
In the asset side it shows its utilisation of fund by way of fixed asset stock investment etc. take a view on the activity of business. they first procure fund from different sources business then utilise for different asset for business operation and earn profit.
the procurement and utilisation is shown in balance sheet and the profit is shown in profit and loss account. Fund flow statement are generally used to analyse procurement and utilisation of fund in managerial level.

Answer 2

BALANCE SHEET

• Balance is a statement that gives accounts of all the assets, liabilities, and capital of the business firm or corporation. It is a T-shaped account in which on the left side we record all the liabilities that include the capital assessment as well and on the right side, we write down and display all the Assets.
• In the left-hand side column, we write the heading as liabilities that include a lot of subheadings such as share capital, internal liabilities, external liabilities, long and short-term liabilities, and a lot of more things.
• Whereas, on the right-hand side column, we record all the assets owned by the firm or corporation be they tangible, intangible, long term, or short term.
  Therefore, the statement, "Balance sheet is a statement of assets and liabilities of sources and uses of capital or both." is completely true.

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