can any one say me why the balance sheet account is tallied? that is why assets must be equally to liablities
5 Replies
123neetu
(61 Points)
Replied 10 May 2007
The liabilities represent the sources of funds and the assets represent application of funds. they are tallied so that the user of the balance sheet understands what the sources of funds are and how they were applied.
Abhijit Kanhegaonkar
(78 Points)
Replied 10 May 2007
If it don't , then call it as "im-balance sheet", why r u wasting time with such nasty questions. Read any elementary accounting book. U will get more than enough.
Praveen
(16 Points)
Replied 10 May 2007
Hi,
First of all, Balance sheet is not an account. It is a statement showing at the end of the period the financial position of a person, concern, firm, etc..,
As you know, our accounting is done on Double entry system. When all the entries are correctly passed the books should be tallied. Trial balance is a check in this regard. Once the Trial Balance is tallied, it means the entries have been correctly passed except for errors of omission, commission etc...
Trial Balance is prepared to show the Accuracy of Accounting.
Balance Sheet is a statement similar to the Trial Balance except that it only includes the Major Accounting heads like Current Assets(having all assets listed under this head), Current Liabilities, etc..
Therefore, once the Trial Balance is tallied and when all the Accounts are taken in Balance sheet, the Balance Sheet is to be a tallied one.
First of all, Balance sheet is not an account. It is a statement showing at the end of the period the financial position of a person, concern, firm, etc..,
As you know, our accounting is done on Double entry system. When all the entries are correctly passed the books should be tallied. Trial balance is a check in this regard. Once the Trial Balance is tallied, it means the entries have been correctly passed except for errors of omission, commission etc...
Trial Balance is prepared to show the Accuracy of Accounting.
Balance Sheet is a statement similar to the Trial Balance except that it only includes the Major Accounting heads like Current Assets(having all assets listed under this head), Current Liabilities, etc..
Therefore, once the Trial Balance is tallied and when all the Accounts are taken in Balance sheet, the Balance Sheet is to be a tallied one.
Bhuvnesh
(CA Final)
(75 Points)
Replied 11 June 2007
what a question. keep it up? are you a ca student from commerce or science?
C.rajesh
(Articles)
(1392 Points)
Replied 31 March 2008
nice question. all the replies are correct. once the trail balance was tallied it is the primafacy evidence that our accounts are arithmetically correct. the b/s is only a statement showing the position of the assets and liabilities on a particular date. i hope ur doubt was clarified
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