Question

Discuss the need of preparing a balance sheet.

Answer 1

The need of preparing a balance sheet is that its shows information about a business.

Explanation:

A balance sheet is a part of financial accounting which is a statement that displays firm's financial position. It includes the items such as owner's equity, liabilities, and assets. This financial statement shows the net worth of a business.

The need of preparing a balance sheet is as follows:

i. Balance sheet is necessary to be prepared as it shows the financial status of a company at a specific point of time.  

ii. The need to prepare this is that it shows current assets and liabilities of the business and helps to estimate the access to funds.

iii. With the help of balance sheet, one can easily get information about debtors, bad debt, creditors, accounts receivable, and so on.

Answer 2

Explanation:

ANSWER-----

The need of preparing a balance sheet are :-

1.slow wasting

2.rapid wasting

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