Question

total of balance sheet ₹1,14,000

Answer 1

[please have a look at attachment, regarding the solution of this question].

After Ascertaining the net profit or loss of the business enterprise, the Businessman would also like to know the exact financial position of his business. For this purpose a statement is prepared which contains all the Assets & Liabilities of the business enterprise. This statement is known as Balance Sheet.

A Balance Sheet can be defined as follows :-

It refers to a statement of Assets & Liabilities of an business enterprise on a particular date.

[Note] :-
• Balance Sheet is a statement, not an account.
• It has no debit or credit side.
• It is prepared on a certain fixed date and not a fixed period.

In a balance Sheet, the Assets & Liabilities are shown in a grouping or order of sequence. This is known as Marshalling of Assets & Liabilities.

Marshalling means grouping or arrangement of Assets and Liabilities in a sequence of order in the balance sheet. We can arrange it Assets & Liabilities in two ways :-

i) As per liquidity :-
Liquidity means which can be easily converted into cash. For example:- Cash, Bank Balance, Stock, Current Liabilities & Assets.

ii) As per Permanency :-
Permanency means which can be returned in a business for long period of time. i.e., For more that 1 year, for example:- Capital, Bank loan, Fixed Assets, long term liability.