... ...
Below is a completed sample balance sheet.
This was achieved using six transactions which are explained in six steps.
Click above button to get our most popular Excel Template for easy bookkeeping! It's free.
Each step shows how each transaction affects the balance sheet and includes a sample of the balance sheet as it is updated.
You can work through these steps to build your confidence and understanding for pulling together a basic balance sheet.
I recommend reading up on the accounting equation first because it plays an important role in producing balance sheets which are derived using the double-entry bookkeeping method.
You can read my article on the accounting balance sheet which explains the meaning of the accounts and sections of a balance sheet.
The layout of this balance sheet sample is explained near the bottom of this page.
If you require a different layout, the templates are down there for you to download.
You can still work through the same steps to see the affect.
The main difference between the different layouts is in how the final totals are calculated - the individual accounts themselves do not change.
You can download the free excel balance sheet template in excel to practice with
There are two other template layouts at the bottom of this page for you to download if you require the other layouts.
There are three main sections:
Assets : are what your business owns or who owes money to your business.
Liabilities : are what your business owes to others - the debt you have to pay off.
Equity : is the value of your ownership of the business.
The net assets and total equity should always equal the same.
(This is a completely fictitious
company made up of my own imagination and is not based on any living
person or real business.)
Shelly-Anne started up a graphic design business which she registered
as a company.
Each day, when she carried out a business transaction the balance sheet changed to reflect this transaction.
This has been greatly simplified with just one or two transactions per day so you can easily see the effect they make.
Each change is highlighted.
There are always two changes to maintain the double-entry method of bookkeeping.
You may want to read just one 'Day' per day to help you digest and
remember what you have read before moving on to the next 'Day'.
Day 1
Shelly-Anne introduced her own money of $5,000.00 into the business.
Effect on balance sheet:
Day 2
The next day, Shelly-Anne brought t-shirts and caps to sell. She paid the cost in full by bank transfer.
Effect on balance sheet :
Day 3
Part 1
The next day, Shelly-Anne sold some shirts and caps to her first customer who paid cash. Shelly-Anne deposited the cash that same day.
Effect on balance sheet
You may have come across balance sheets with 'Retained Earnings' listed above 'Current Earnings'. Retained earnings are the accumulated net profits from previous years' trading. Current earnings will only ever show the net profit from the current financial year.
Part 2
Also on this third day Shelly-Anne used petty cash to buy some stationery
Effect on balance sheet :
Day 4
On the fourth day, Shelly-Anne brought a van for her business. She was given approval of a finance loan to pay for it, which she was contracted to pay off over 3 years.
Effect on balance sheet
Day 5
On the fifth day, Shelly-Anne had run out of personal funds and needed to buy some groceries so she used $130 of the business funds.
Effect on balance sheet:
Day 6
On the sixth day (the final day for this business model), Shelly-Anne brought a specialized graphic printer.
She was able to open an account with the supplier, so she did not have to pay for it right away, but it did have to be paid for by the end of the following month.
Effect on balance sheet :
With the above in mind, you can download the excel template for the two different layouts and see if you can work through each step to get the balance sheet in balance.
Below are examples of the Shelley-Anne's balance sheet using the different balance sheet layouts explained above.
Balance Sheet Sample Other Equation Layout
Balance Sheet Sample Side by Side Layout
Home > Balance Sheet > Sample Balance Sheet
Facebook Comments
Leave me a comment in the box below.