Purpose Of The Spread Sheet

927 WordsDec 22, 20154 Pages
Purpose of the spread sheet The balance sheet is one of the main financial statements that an organization’s uses. The managers, the lenders and also investors will use the balance sheet to see the financial status of an organization. If an organization is going to get trades they will use the balance sheet to show a snapshot of the organization. In order for the organization to use a balance sheet, the balance sheet must be organized (Adkins, 2015). The balance sheet also shows a summary that has all the organizations financial positions within a year time (Adkins, 2015). The balance also shows the organizations equity that equals the total assets minus total liabilities (Epstein, 2014). A formal balance sheet must have independent auditing to make sure it is accurate and valid. Organizations will also use the balance sheet to show their performance and their progress throughout the year (Epstein, 2014). The balance sheet will have three sections, the first one is the assets section, the second one is the liabilities section and the third one section is the equity. The assets section will have different categories of land, equipment, account receivable, cash and inventory. The liability section will have accounts payable, bonds, and other obligations. The Equity section will be different with the different organizational structures (Adkins, 2015). The whole purpose of the balance sheet is that stakeholders are able to use it to analyze all the organizations financial

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