Accounting Blog

What is a Balance Sheet?

What is a Balance Sheet?

Every accountant must know: “What is a balance sheet?”. The balance sheet is a tabular version of the reflection of the financial performance of the organization on a certain date. In the most widespread form in the Russian Federation and some other countries, the balance sheet consists of two equal parts, one of which shows what the organization has in monetary terms (balance sheet asset), and the other — from what sources the organization acquired it (balance sheet liability). The basis of this equality is the reflection of property and liabilities by the method of double entry in accounting accounts.

Balance sheet, compiled on a specific date, allows you to assess the current financial condition of the organization, and the comparison of the balance sheets compiled on different dates — to track the change in its financial condition over time. The balance sheet is one of the main documents that serve as a source of data for the economic analysis of the enterprise.


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The Peculiarities of a Single Entry System and a Double Entry System

The Peculiarities of a Single Entry System and a Double Entry System

Every bookkeeper must know about the double entry system. The double entry system in bookkeeping is one of the main elements of the formation of reliable information on the economic operations of the enterprise. The rule of double entry of business transactions, in comparison with the rules of a single entry system, allows you to observe the balance and identify errors in bookkeeping.


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The types of bookkeeping accounts

The types of bookkeeping accounts

The choice of bookkeeping accounts means the choice between the following types of accounts:

  • Cash is a type of bookkeeping accounts that reflects the cash balance, i.e., notes and coins available in cash, balances on bank accounts, checks, and other assets equated to cash.
  • Accounts receivable is money owed by customers (individuals or entities) to another entity in exchange for goods or services. That has been delivered or used but has not yet been paid.
  • Inventory is a type of bookkeeping account connected with the equipment of the company and its maintenance;
  • Accounts payable is the money the company owes for already purchased goods or services rendered to it that have not yet been paid.
  • Loans payable is a type of bookkeeping account that represents the money and interest that the organization owes to third party lenders.
  • Sales is an account for registration of trade transactions; it reflects information about the sale of products: sales volumes, costs associated with the sale, proceeds from the sale.

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