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Balance Sheet As The Last Step Of Final Account

Balance sheet is the last step of final account. Balance sheet is prepared after the preparation of profit and loss appropriation account. Balance sheet is statement not an account. Therefore balance sheet is also known as "Position Statement". Balance sheet is defined as accounting statement of financial position of a company presented at specific point of time usually at the end of the accounting period.

Balance shows assets on one side and liabilities on other side. Balance sheet may be prepared in the horizontal or in the vertical form.

Balance sheet discloses the financial position of a company at a specific point of time and for a fixed period. Hence, even a single transaction will change assets and liabilities.

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