What is the objective of the balance sheet?
It gives information about the current financial condition of the business.
- It gives a broad picture of the value of the assets like accounts receivable, inventory and fixed assets, cash balances, etc.
- It displays the amount of debt the business owes to all the creditors
- It also measures the solvency of any business. The business is regarded as a solvent when the assets exceed the business liabilities.
- It also shows whether the business is over-trading or under-trading