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The balance sheet lists assets, capital and liabilities separately. This is an accepted convention about the assets and liabilities are demonstrated in sub groups and listed in the order of their liquidity or Permanence.
The balance sheet in our illustration or format is presented in the T account form. Such is the assets are listed in liabilities and one side and owners' equity on another.
The other commonly used way of presentation is the report form where liabilities and capital are listed over the assets. Though, the presentation matters extremely little as the balance sheet represents the equality among assets, capital and liabilities.
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Direct expenses comprise all those expenses incurred in bringing the goods to the place of business or trade or in-production process till the goods are placed in saleable places.
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Current Assets These are assets that will normally be converted in cash within a year or inside the operating cycle. The operating cycle is the duration in time considered by
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