Balance Sheet And Its Liabilities Side( Part 1 of 3)
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WHAT IS A BALANCE SHEET? |
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 A Balance Sheet is a snapshot of the financial position of an entity. This snapshot is at a point of time. Say, as at 7 May 2006, you look at Company A’s balance sheet, it reflects the financial position as at that day. After that day, the financial position company A can change to a better or worse situation. Also, remember that in the Balance Sheet, we have the three (3) key components: Assets= LIABILITIES + Owners’ Equity ( Refer to my illustration for the Dual Aspect Concept)  |
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DEFINE WHAT ARE THE CHARACTERISTIC OF LIABILITIES? |
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 Future transfer or use of assets  the entity has no discretion to avoid it  Transaction already happened  |
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WHAT ARE THE MAJOR COMPONENTS OF THE TOTAL LIABILITIES? |
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Comprises: |
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1.     Current Liabilities and |
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2.     Long Term Liabilities |



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