Balance Sheet

HEMS - Hotel Manager

Balance Sheet

Overview

A Balance Sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It details what the company owns (assets), what it owes (liabilities), and the shareholders' equity.

Fields

• Date: Enter the date for which the balance sheet is being prepared. The format should be mm/dd/yyyy.
• Submit: Click this button to generate the balance sheet for the specified date.

Table Columns

Once the balance sheet is generated, the results will be displayed in a table with the following columns:

• Item/Description: The name or description of the asset, liability, or equity item.
• Debit: The total debit amount for the item.
• Credit: The total credit amount for the item.

Components

1. Assets: Resources owned by the company that have economic value. They are typically divided into current assets (e.g., cash, accounts receivable) and non-current assets (e.g., property, equipment).
2. Liabilities: Obligations the company owes to others. These are usually divided into current liabilities (e.g., accounts payable, short-term debt) and long-term liabilities (e.g., long-term debt).
3. Shareholders' Equity: The residual interest in the assets of the company after deducting liabilities. It includes items like common stock, retained earnings, and additional paid-in capital.

Usage

1. Enter Date: Input the date for which you want to prepare the balance sheet.
2. Submit: Click the Submit button to generate the balance sheet.
3. Review Table: The table will display the assets, liabilities, and equity items with their respective debit and credit totals. If no entries are available, the table will show "Table is Empty."

Importance

The Balance Sheet is essential for:

• Financial Health Assessment: It provides a clear picture of the company's financial position, showing what it owns and owes.
• Decision Making: Investors, creditors, and management use the balance sheet to make informed decisions about investments, lending, and business strategies.
• Compliance: It is a required financial statement for regulatory and reporting purposes.

Example

Item/Description	Debit	Credit
Cash	10,000
Accounts Receivable	5,000
Property, Plant, and Equipment	50,000
Accounts Payable		8,000
Long-term Debt		20,000
Common Stock		30,000
Retained Earnings		7,000

In this example, the total assets (65,000) equal the total liabilities and shareholders' equity (65,000), indicating that the balance sheet is balanced.

Ensure all entries are accurate and complete before finalizing the balance sheet to maintain the integrity of your financial records.