Book-keeping

The Balance sheet

Chapter 9

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007 9-1

 No double entry in
balance sheet

and
and are
are
stem:
ystem:

he debit
the
the debit and
and
accounts.
accounts.

es
es arranged
arranged according
according to
to whether
whether they
they are
are

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 9-2

 Fixed assets

Fixed
Fixed assets:
assets:

•• Were
Were not
not bought
bought primarily
primarilyto
tobe
besold
sold
••Are
Areto
to be
beused
usedin inthe
thebusiness
business
••Are
Areexpected
expectedto tobe
be of
of use
use to
tothe
thebusiness
businessfor
for aalong
longtime
time
••Examples
Examplesinclude:
include:
--Land
Landand
andbuildings
buildings
--Fixtures
Fixturesand
andfittings
fittings
--Machinery
Machinery
--Motor
Motor vehicle
vehicle

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 9-3

 Current assets

These
These are
are listed
listed in
in increasing
increasing order
order of
of
liquidity
liquidity starting
starting with
with the
the assets
assets furthest
furthest away
away
from
from being
being turned
turned into
into cash.
cash. For
For instance:
instance:

1.
1. Stock
Stock
2.
2. Debtors
Debtors
3.
3. Cash
Cash at
at bank
bank
4.
4. Cash
Cash in
in hand
hand
Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 9-4
 Liabilities

There
There are
are two
two categories
categories of
of liabilities:
liabilities:
current
current liabilities
liabilities and
and long-term
long-term liabilities.
liabilities.

•• Current
Current liabilities
liabilities are
are items
items that
that have
have to
to be
be paid
paid
within
within aa year
year of
of the
the balance
balance sheet
sheet date.
date.

•• Long-term
Long-term liabilities
liabilities are
are items
items that
that have
have to
to be
be
paid
paid more
more than
than aa year
year after
after the
the balance
balance sheet
sheet date.
date.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 9-5

 A properly drawn up balance
sheet (horizontal format)

AA properly
properly drawn
drawn up
up balance
balance sheet
sheet should
should
have
have five
five categories
categories of
of entries:
entries:

Current
Current liabilities
liabilities
Fixed
Fixed assets
assets Long-term
Long-term liabilities
liabilities
Current
Current assets
assets Capital
Capital

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 9-6

 A properly drawn up balance
sheet (vertical format)

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 9-7

 End of Chapter 9
The Balance sheet

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007 9-8