ABSTRACT
A balance sheet shows assets and liabilities at a certain moment. The real values of these assets and liabilities can be determined by listing what the firm possesses. Each firm prepares a balance sheet once a year to show stakeholders the firm’s financial position. This chapter familiarises students with the preparation of balance sheets, beginning by listing out the components of a balance sheet along with their definitions. Examples are provided to show the effect of changing financial facts on the balance sheet. The chapter also includes multiple exercises that help students try themselves and prepare balance sheets for a set of financial scenarios.
