How do you prepare a balance sheet in accounting?

Answer 1

Categorize all assets by type (cash, receivables, equipment). Categorize all liabities by type (accruals, Accounts Payable, loans payable).

Determine initial investment in business. Difference is "retained earnings", which is cumulative profit from the start of the business.

The above assumes proper tracking of sales, purchases, disbursements, etc.

Balance sheet shows the financial positions of any company by comparing two sections: liabilites and assests.

Search Google for "benchmarking-your-business-against-industry-averages" for a description of how you can find common asset and liability types of US corporations.

Answer 2

A basic balance sheet is formatted beginning with Assets (current first then non-current) Liabilities (Current first then long-term) and Owner (shareholders) Equity. The account amounts are taken from the General Ledger after all temporary accounts are closed at the end of the fiscal year. Temporary accounts are Expenses and Revenue accounts which are closed into income summary and then finally retained earnings (or Statement of Retained Earnings which is an O.E. account)

Answer 3

cash flow statement meaning and prepare