Question

Mention whether following statements are True or False :
i. A Balance Sheet shows the financial position of a business
for the whole year.
ii. Both P & L Account and Balance Sheet are position statements.
iii. Asset side of a balance sheet shows only the fixed assets of a
business.
iv. Liabilities side of a Balance Sheet shows both internal and external
liabilities.

Answer 1

Answer:

Explanation:

i) False

A balance sheet does show the financial position of a business or any organization that is preparing it,but for a particular point of time.

ii)False

A balance sheet though is a position statement but P & L Account is an income statement depicting the profits and losses during a course of time.

iii)False

The Asset side of the balance sheet shows all the assets of the company in order of their liquidity.They are divided into current,non-current,long term assets.

iv) True