Balance sheet- Importance, Sample Format, Requirements

 

Balance sheet- Importance, Sample Format, Requirements

What is a Balance Sheet

Balance sheet is a main report in the business. It provides financial condition on  the Balance Date. It provides  assets and liabilities details. Balance Sheet contain three major part bashed on

 

Assets= Equity+ liability

 Assets= This is a assets  resource created by entity.

Equity= This is amount invested by member/ owner

Liabilities= This is  debts amount need to be paid by entity.

 

 

What is the balance sheet format?

In the financial accounting , a balance sheet is a summary of the financial balances of an individual or organization ,whether it be a sole proprietorship ,a business partnership , a corporation ,private.  According to Company Act 2013 an entity can prepare  annual balance sheet  as per prescribed schedule . Balance sheet should  can be prepare in excel.

Financial statement includes Balance Sheet and Profit & loss account. Balance sheet format may in vertical or horizontal. There may be provisional balance sheet  for a individual, society, trust, llp, company,  private limited company or other organization such as government or not-for -profit entity .

 

Sample format of Balance sheet

 

Importance of Balance sheet

Balance Sheet is a company performance report. The balance sheet provides a picture  of the financial health of a business at a given moment in time usually the end of a month or financial year. It can tell you if you owe more money that what you currently have, the current value of your assets and the overall values of your business.

  1. It is necessary document need to file annually with Ministry of company affair.
  2.  It is a document for comparison of company growth in different period of time.
  3. It is presented  before financial institution for take a credit or loan from bank.
  4.  It is presented in MCA and Income Tax Department for tax calculation.
  5. It is document for member or stake holder/ share holder to invest money in a company.
  6. It is also need in Goods and Service Tax assessment.
  7. It is also need to file Income Tax Return for relevant assessment year.

 

MCA compliance requirement

As a part of annual e-filling , companies incorporated under the  Companies Act 2013   need to file  Audited Balance sheet and Profit & loss  account according to prescribed  New schedule   III  .  A company  required to e file the following documents with the registrar of companies (ROC) compliance certificate

  1. Balance Sheet
  2.  Profit & loss account
  3. Board report

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