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Balance Sheet Formats: Horizontal vs Vertical

The document discusses the two main formats for presenting a balance sheet: the horizontal presentation and the vertical presentation. The horizontal presentation lists assets on the left and liabilities and equity on the right. The vertical presentation lists assets first, followed directly below by the corresponding liabilities and equity sections. Sample balance sheets in both the horizontal and vertical presentation styles are provided for a company called XYZ Company to illustrate the two formats.

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760 views3 pages

Balance Sheet Formats: Horizontal vs Vertical

The document discusses the two main formats for presenting a balance sheet: the horizontal presentation and the vertical presentation. The horizontal presentation lists assets on the left and liabilities and equity on the right. The vertical presentation lists assets first, followed directly below by the corresponding liabilities and equity sections. Sample balance sheets in both the horizontal and vertical presentation styles are provided for a company called XYZ Company to illustrate the two formats.

Uploaded by

jnyamande
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Format Of Balance Sheet: The Horizontal And Vertical Presentation

A Balance Sheet is also called the Statement of Financial Position. It is a snapshot of a company's financial position at a particular point in time. The Accounting equation which is Assets=Liabilities+Stockholder's Equity is closely link to the Balance Sheet. Because of this accounting equation and the double entry system, the Balance sheet must always tally. Append below are two format namely the Horizontal and Vertical Presentation to display the Balance sheet of a company.

(a)Format of A Balance Sheet: Horizontal Presentation

The horizontal presentation uses a format that present assets on the left and liabilities and equity on the right

XYZ Company Balance Sheet As at December 31st 2008 Assets Liabilities & Stockholders Equity $ Current Assets Cash Accounts Receivable Inventories Deposits, prepayments Total Current Assets Current Liabilities 10,000 Accounts payable 20,000 Salaries Payable 30,000 Total Current Liabilities 5,000 Bonds payable 65,000 Mortgages Total Liabilities Stockholders equity 55,000 Common stock 10,000 Retained earnings 130,000 Total Liabilities and Stockholders $ 15,000 9,000 24,000 20,000 35,000 79,000

Property, plant and equipment, net Intangible assets Total Assets

50,000 1,000 130,000

equity

(b) The Vertical Presentation of The Format Of A Balance Sheet

The vertical presentation show the assets followed by liabilities and equity directly below the assets.

XYZ Company

Balance Sheet As At 31 st December 2008

Assets

Current Assets Cash Accounts Receivable Inventories Deposits, prepayments Total Current Assets Non Current Assets Property, plant and equipment, net Intangible assets Total Non Current Assets Total Assets
Liabilities & Stockholders Equity

10,000 20,000 30,000 5,000 65,000 55,000 10,000 65,000 130,000 $

Current Liabilities

Accounts payable Salaries Payable Total Current Liabilities Non Current Liabilities Long Term Bonds payable Mortgages Total Non Current Liabilities Total Liabilities Stockholders equity Common stock Retained earnings Total Liabilities and Stockholders equity

15,000 9,000 24,000 20,000 35,000 55,000 79,000 50,000 1,000 130,000

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