write 10 items of assets and liabilities side of balance sheet
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The balance sheet is a statement which states the assets and liabilities of a firm as at a certain date. As even a single transaction can make a difference in assets or liabilities, so the balance sheet is true only at a particular period of time. This is the significance of “asset” in the balance sheet. It is based on the accounting equation that is:
Total assets = Total liabilities + Capital
As balance sheet is a statement and not an account so there is no debit or credit side. So, Assets are shown on the right-hand side and liabilities on the left-hand side of the balance sheet.
Classification of Assets and Liabilities
Assets
Assets can be classified as:
a. Long term assets:
Long-term assets are those assets which are not to be sold by the firm and to be used for a long period of time, such types of assets are also known as Fixed assets. For example, land and building, plant and machinery, vehicles, equipment, etc.
b. Current assets:
Currents assets are those assets which can be converted into cash easily from the market. Generally within a year. For example, cash in hand, cash at bank, trade receivables, inventory, etc.
c. Intangible assets:
Intangible assets are those which cannot be seen or touched. For example, goodwill, patents, copyrights, etc.
Liabilities
Liabilities can be classified as:
a. Long term liabilities:
Long-term liabilities are those which exists for one or more than one year. For example, long-term loan from the bank.
b. Current liabilities:
Current liabilities or short-term liabilities are those which are to be settled within a year. For example, trade payables, creditors, outstanding expenses, etc.
Total assets = Total liabilities + Capital
As balance sheet is a statement and not an account so there is no debit or credit side. So, Assets are shown on the right-hand side and liabilities on the left-hand side of the balance sheet.
Classification of Assets and Liabilities
Assets
Assets can be classified as:
a. Long term assets:
Long-term assets are those assets which are not to be sold by the firm and to be used for a long period of time, such types of assets are also known as Fixed assets. For example, land and building, plant and machinery, vehicles, equipment, etc.
b. Current assets:
Currents assets are those assets which can be converted into cash easily from the market. Generally within a year. For example, cash in hand, cash at bank, trade receivables, inventory, etc.
c. Intangible assets:
Intangible assets are those which cannot be seen or touched. For example, goodwill, patents, copyrights, etc.
Liabilities
Liabilities can be classified as:
a. Long term liabilities:
Long-term liabilities are those which exists for one or more than one year. For example, long-term loan from the bank.
b. Current liabilities:
Current liabilities or short-term liabilities are those which are to be settled within a year. For example, trade payables, creditors, outstanding expenses, etc.
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