Balance sheet is the summarized statement of the company, which shows the assets as the resources possessed by the company in one hand and capital and liabilities on the other hand at the given date. It is prepared from the balances of assets and liabilities Extracted from the trial balance of a company for a period.
The importance of balance sheet are as follows:
- It helps to know the true financial position of a company showing details regarding Capital, assets and liabilities.
b. It helps to get information about capital structure of the firm by disclosing owner’s Fund and borrowed capital