The balance sheet is a vital aspect of every company. It helps them to present their financial health to the public and investors. So, as a finance student, it is crucial to know the correct way to prepare a balance sheet. However, many students do not create in a proper format and end up with frustration. Due to this, they search, “How to get help with finance homework in preparing a balance sheet?” But, to find a reliable service can be difficult. So, if you are also facing the same issue, you can read this article. In it, you will learn some simple tips to make it.
10 Tips to Prepare a Balance Sheet for Finance Homework
In this section, you will learn the tips that help you prepare a balance sheet in a correct manner.
Draft a Heading
The first thing you should keep in mind while preparing a balance sheet is its heading. For this, you must write “balance sheet” at the top along with the company name. Then, in the next line, you will write a date of preparation. Usually, it is created at the end of a financial year or a quarter. By mentioning the date, it becomes easy to find the accounts whenever it is required.
Make an Outline
After writing the date and a company name, you will create an outline of the balance sheet. The basic structure of it contains five parts. You must make a section of assets in the top left corner and liabilities at the top right. After this, you need to include the owner’s equity below liabilities. Then, write the total assets part at the bottom of the balance sheet. At last, you have to combine the liabilities and owner’s equity categories under total assets.
Create List of Assets
The structure of a balance sheet helps you include all the relevant information in the correct place. Now, start writing all the sections of it. So, first, you have to create a list of company assets. It involves cash in hand, inventory, plant, and so on. When you draft it, you should list the items a firm can convert into cash first. After this, you will write other things.
Categorise Assets
A firm has many assets; some of them are current and others are non-current(long-term). So, you should write a sub-heading to include the items according to their type. So, you have to find out and label them. Long-term assets are those that a company cannot convert into cash immediately. It includes patents, investments, plants, and so on. On the other hand, short-term assets are cash, marketable securities, and so on that a firm can turn into money within less time.
Write Liabilities
After you have written all assets, you will include the liabilities in a separate section. These are debts a firm has to pay to other parties. It includes short-term loans, lease agreements, bonds, and so on.
In this section, you first have to write the liabilities of a firm that it has to pay within one year. It is crucial to include all company debts to present its correct financial image.
Categorise Liabilities
Next, you have to categorise the liabilities as current and non-current(long-term). So, you should label them correctly to identify the amount of debt a company has to repay. In current liabilities, you write the amount of items, a firm has to pay within one year like short-term loans, interest payable, income tax, and so on. On the contrary, debentures, long-term leases, deferred revenue, and so on are examples of non-current debts. Usually, a firm does not have to pay these debts in one year.
Calculate Owner’s Equity
You have written down the assets and liabilities of a firm in their correct place. So, as per the structure of a balance sheet, you will calculate the owner’s equity next. It is also known as shareholder’s equity or net assets. It is the part of a company’s asset that an owner can claim as his own. To find it, you have to subtract total liabilities from the sum of assets. This section helps to assess the net ownership position of a businessman.
Add Total Liabilities and Equities
Once you have calculated the owner’s equity, you will add it to the total liabilities. After this, you should check whether its total is equal to the sum of assets. It is a vital accounting principle. If their amount does not match with each other, it is a sign that you made some mistake. For this, you should go through the list of items included. Moreover, you have to check the calculations in a balance sheet.
Draft Additional Notes
There are some data that you cannot include in the table, but you write them below it. You can explain the accounting methods used in a few words in footnotes. Also, you write the description of the calculations of the amount you did in a balance sheet. But, when you create it in an exam, you have to make it quickly. Due to this, it may be possible that you forget to write crucial data that can impact the accuracy of the balance sheet. For this, you can learn short tricks of preparing by searching for the best exam help for financial accounting.
Check the Accuracy of the Balance Sheet
Next, you have to check the accuracy of a balance sheet. It means the total of assets side should be equal to the sum of liabilities part. For this, identify that you included all the numbers. Moreover, you should find the items listed in their respective section. Also, check that you wrote all the relevant data in it. For this, match the items and their numbers from the referred documents.
Conclusion
Above are the tips that help you prepare a correct balance sheet. You first write down the name of the company along with the date of preparation. Then, you will list the assets and liabilities in a separate section. After this, calculate the total of them and equalise both sides. However, if you still face issues in preparing a balance sheet, you can search for experthelp with finance homework. In this way, you will get professional assistance.
For more – How to Reduce Procrastination While Writing Assignments?
