What is statement of Affairs ?How does it differ from the Balance sheet.
Answers
BASIS FOR COMPARISON STATEMENT OF AFFAIRS BALANCE SHEET
Meaning- Statement of Affairs is a statement showing assets, liabilities and capital of the entity prepared on the basis of a single entry system of bookkeeping. A Balance Sheet is a statement showing assets, liabilities and equity of the company prepared on the basis of the double entry system of bookkeeping.
Capital- Nothing more than a balancing figure. Derived from ledger accounts and so total assets are equal to total liabilities.
Part of Financial Statement- No Yes
Objective- To find out the opening or closing capital. To show the company's financial position.
Estimation of Values- Yes No
Accuracy- Very less More
Compulsion of Preparation- Yes No
Format- Not specified Specified
Answer:
Statement of Affairs is a declaration displaying assets, liabilities and capital of the entity organized on the premise of a single entry system of bookkeeping.
Explanation:
Statement of Affairs is a declaration wherein there are two sections left and right. The left phase represents liabilities, while the right one is for assets. It is prepared on the premise of a single entry system of bookkeeping.
A Balance Sheet is a declaration which highlights the economic status of the agency at a specific date. It has two sections, assets, and equity & liabilities.
Statement of affairs is regularly confused with Balance Sheet, because it additionally lists out assets and liabilities of the agency. Balance Sheet exhibits the position of business, at a given date.
There are a few noteworthy variations among the declaration of affairs and balance sheet, withinside the sense that the previous is prepared from incomplete facts while the latter is prepared from proper facts maintained as in step with of double entry system.