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Basic Instructions for a Sole Proprietorship or a Partnership Simple Balance Sheet

Basic Instructions for a Sole Proprietorship or a Partnership Simple Balance Sheet. Step by Step Instructions.

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Basic Instructions for a Sole Proprietorship or a Partnership Simple Balance Sheet

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  1. Basic Instructions for a Sole Proprietorship or a Partnership Simple Balance Sheet

  2. Step by Step Instructions • Always start with the name of the company, the title of the statement, and the period for which the statement is being prepared. In the case of a balance sheet the period is always a set date the document is prepared such as the end of a month, fiscal period or year. The body of the balance sheet is divided into two halves on the left side is the asset section and on the right side is the liabilities and owner’s equity section.

  3. Asset Section of the Simple Balance Sheet • Step 1.In the center of the left hand two columns of the body of the balance sheet center the title “Assets.” • Step 2.On the next few lines of the statement list all assets in order of liquidity (how fast the assets can be changed into cash). Place the dollar value of the asset in the amounts column next to the account title.

  4. Step 3. Add all of the assets values together and place the total in the amounts column and label it “Total Assets.” Make sure to place a double underline under the total for this line item. Dollar signs are to be placed at the top and bottom of any column of numbers that are either added or subtracted.

  5. Liabilities and Owner’s Equity section of the Simple Balance Sheet • Step 1.In the center of the right hand two columns of the body of the balance sheet center the title “Liabilities and Owner’s Equity” on the first line. There is no value in the amounts column because this is a title. • Step 2.On the next line place the title “Liabilities” this is a title so no value will be placed in the amounts column to the left.

  6. Step 3.On the next few lines of the statement list all liabilities in order of liquidity (how fast the debts must be paid off). Place the dollar value of the amount owed in the amounts column next to the account title. • Step 4. Add all of the liabilities values together and place the total in the amounts column and label it “Total Liabilities.” • Step 5. Skip a line and on the next line place the title “Owner’s Equity” with no dollar value in the amounts column to the left.

  7. Step 6.Now list the owner’s capital account or owners’ capital accounts. These accounts are named by listing the owner’s name then a comma and the title capital. • Step 7. Next add together the total liabilities amount plus the owner’s equality account and place it on the next line with the title “Total liabilities and owner’s equality.”Double underline this total and place dollar signs at the top and bottom of the amounts column. You will only need to subtotal the owner’s equity section if it is a partnership before you total the liabilities and owner’s equality section.

  8. The three line heading.  NEVER  abbreviate the title unless the company itself does.  Months are never abbreviated either. • Headings and Sub headings: Assets, Liabilities and owner's equity should be consistent.  If you have it center they should all be center or if you had it left justify they should all be that. • Account Receivable and Account Payable (can be a sub heading) Add the individual person or company's name under the AR or AP  So the order is by alpha of last name or first letter of the company.

  9. Example • So it would look like this: • Account Receivable •    - ABC Company •    - Mable Cakes •    - T. Apple •    - Z. Marks 

  10. Ensure the final totals (Total Assets and Total Liabilities and Owner's Equity) are on the same line. • Double underline when both totals are equal. • Single underline is to indicate that you're doing calculation and it should go with the total.   • Dollars sign happen on the first value of each column, at the beginning of a section and final totals  • I know the sample has only four.  But you should use $$ for total liabilities since it will start a new section.

  11. TheEnd

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