The Balance Sheet of a business possesses the following characteristics:
- Balance sheet being a statement has no ‘debit’ or ‘credit’ sides that is why ‘To’ or ‘By’ words are not prefixed to the name of accounts.
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- Balance sheet is prepared at the end of an accounting period – it is for a particular day, so it disclose the financial position on a particular day and not for a particular period.
- Balance sheet disclose how much business owes to others and how much others owe to business.
- The total of ‘Assets’ an ‘Liabilities’ sides are always equal.