Lesson:
17Topic: Formal financial statements (the Balance Sheet)
Objectives:
By the end of this class, the students will come to understand the process involved in creating a formal
Balance Sheet.
| Inner Circle Internet Solutions | |||
| Balance Sheet | |||
| As at September 30, 2003 | |||
| Assets | |||
| Bank | $ 7,000.00 | ||
| Accounts Receivable: | |||
| Brown | $500.00 | ||
| Smith | 1,000.00 | ||
| Zwier | 700.00 | 2,200.00 | |
| Supplies | 600.00 | ||
| Office Equipment | 3,600.00 | ||
| Automobiles | 16,600.00 | ||
|
Total Assets |
$ 30,000.00 |
||
|
Liabilities |
|||
| Bank Loan Payable / Royal Bank | $10,000.00 | ||
| Accounts Payable: | |||
| Business Depot | $2,700.00 | ||
| Future Shop | 3,300.00 | 6,000.00 | |
|
Total Liabilities |
16,000.00 | ||
| Owner's Equity | |||
| M. Krieger, Capital as at August 31st |
$10,000.00 |
||
| Add: Net Income |
$4,700.00 |
||
| Less: Drawings |
700.00 |
||
| Increase (Decrease) in Capital |
4,000.00 |
||
| M. Krieger, Capital as at September 30th | 14,000.00 | ||
|
Total Liabilities and Owner's Equity |
$ 30,000.00 |
||
The class will examine the following concepts related to the Income Statement in detail:
Finally, the student should understand the following concepts related to the Income Statement:
Evaluation Exercise:
1) Referring the Trial Balance contained within the attached Excel Spreadsheet Package , use Excel to complete the Report Form Balance Sheet.
Expectations Addressed:
The "Fundamental Accounting Practices" strand of the BAF3M Ministry of Education Curriculum Guidelines outlines all of the following specific expectations. The expectations addressed by this lesson have been highlighted below.
Introduction to Accounting as a Discipline:
explain the purpose of accounting;
explain the difference between accounting and bookkeeping;
identify the users and uses of accounting;
identify the Generally Accepted Accounting Principles (GAAP) and explain their importance.
Business Structures:
describe the characteristics of different forms of business organization, including sole proprietorship, partnership, and corporation;
describe the advantages and disadvantages of different forms of business organization, including sole proprietorship, partnership, and corporation;
explain the differences among the equity sections of different forms of business organization, including sole proprietorship, partnership, and corporation (e.g., capital account in a sole proprietorship versus common stock in shareholders’ equity in a corporation).
The Accounting Cycle for a Service Business:
assess the effects that transactions have on the accounts and financial statements of a service business;
record transactions using the journals and ledgers of a service business;
prepare a trial balance and the financial statements for a service business;
record adjusting and closing entries for a service business (e.g., prepaid expenses, amortization, accruals);
describe the impact of year-end procedures, including adjusting and closing entries, on the financial statements of a service business;
apply the Generally Accepted Accounting Principles (GAAP) at each stage of the accounting cycle for a service business.
References: