I'm creating a balance sheet from scratch.
1. Is it true that on a balance sheet, Total Assets must equal Total Liabilities and Owner's Equity?
2. Let's say on the Assets side of the balance sheet I have $1,000 in cash, and $10,000 in Account Receivable
Let's say on the Liabilities and Owner's Equity side of the balance sheet I have $100 in Accounts Payable.
What other entries do I use on the "Liabilities and Owner's Equity" side to make it balance with the $11,000 I have on the Assets side?
All the options for the entries on the Liabilities and Owner's Equity side are listed below. Let me know what I would do in this example to balance out the balance sheet.
Current Liabilities
Accounts payable
Short-term loans
Income taxes payable
Accrued salaries and wages
Unearned revenue
Current portion of long-term debt
Total current liabilities
Long-Term Liabilities
Long-term debt
Deferred income tax
Other
Total long-term liabilities
Owner's Equity
Owner's investment
Retained earnings
Other
Greetings!
I am qualified Accountant, Certified Quickbook ProAdvisor and hold dual degrees in Commerce and Law. I have completed Level II of ICAI (Equivalent to ACCA/CPA) and also a member of the Institute of Company Secretaries of India.
I have nine years of experience in accounting. I will solve your questions listed in the project.
Thank you.