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What information does a balance sheet provide?

What information does a balance sheet provide? How do accounting conventions and asset valuation affect measuring and reporting financial position? (Chapter 2)

Reference:

Atrill, P. & McLaney, E. (2008). Accounting and Finance for Non-Specialists.
6th ed. Harlow, England: FT Prentice Hall

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QUESTION

What information does a balance sheet provide? How do accounting conventions and asset valuation affect measuring and reporting financial position?

TUTORIAL

A balance sheet is an accounting statement, prepared at a certain date, which provides information on the assets, liabilities and owners equity of a firm.

The balance sheet provides information about the assets invested into a firm. The valuation, of the assets, typically follows the conservationism principle. This principle requires that items are value at lower of cost or market value. Assets are broadly categorised into two: current and fixed assets. This break down, of assets into categories is to obey the requirements under ...

Solution Summary

What information a balance sheet provides is determined. The asset valuation affect measuring and reporting financial positions is given.

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