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Layout of the Balance Sheet

A balance sheet could be presented in two ways:

  1. T-format
  2. Vertical format

T- FORMAT

BALANCE SHEET AS AT 31ST DECEMBER, 2000

VERTICAL FORMAT

BALANCE SHEET AS AT 31ST DECEMBER, 2000

Preparation of balance sheet

A hypothetical question is used to demonstrate the preparation of balance sheet thus:

The trial balance of James Peters as at 30th June, 2012 was as follows:

Stock at close was N50, 000.

Prepare:

  • Trading, Profit and Loss Account for the year ending 30th June 2012
  • Balance Sheet as at that date.

Solution prepared using T- format

James Peters

Trading, Profit and Loss Account for the year ending 30th June, 2012

Balance Sheet as at 30th Dec.  2012.

NECESSARY ADJUSTMENTS:

CLOSING STOCKS

In the trading account, closing stock shall be deducted from the cost of goods available for sale to obtain the cost of goods sold which in turn shall be deducted from sales to obtain the gross profit.

Lesson tags: Financial Accounting Lesson Notes, Financial Accounting Objective Questions, SS1 Financial Accounting, SS1 Financial Accounting Evaluation Questions, SS1 Financial Accounting Evaluation Questions Third Term, SS1 Financial Accounting Objective Questions, SS1 Financial Accounting Objective Questions Third Term, SS1 Financial Accounting Third Term
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