Balance Sheet report: options and information

Items marked with a double asterisk (**) are available in Microsoft Office Accounting Professional 2008 only.

The Balance Sheet report is a statement or snapshot of the financial position of the business at a specific time, and it is a companion report to the Profit and Loss report, which is a record of the financial transactions of the business for a specific period of time. The Balance Sheet report is one of the most important reports in Microsoft Office Accounting 2008. The report displays the current date, but you can modify the date by using the Date toolbar or the Select Filter Options dialog box.

In addition to profit and loss statements, balance sheets are the most common forms of report information that are required by outside lenders, such as banks and new suppliers. The creditworthiness of the business is determined by the information that these reports provide. Detail from a balance sheet can be used to determine the cash flow that is available to finance growth or repay debt.

A balance sheet can help a business owner to quickly get an idea of the financial strength and capabilities of the business. It can also answer various questions that arise. Is the business positioned to expand? Can it handle the normal fluctuations of revenues and expenses? Or should the business seek outside sources for additions to cash reserves?

Balance sheets are commonly run at the end of accounting cycles, usually monthly or at the end of the financial year, and they are particularly useful when they are analysed over time. Comparing reports on a monthly or yearly basis can reveal important information about business trends, such as the ability to collect sales revenues, how you manage the stock and your success in paying creditors.

A balance sheet shows the company's financial status: what it owns (assets), what it owes (liabilities) and the owner's investment in the business (net worth or equity). Because this report is a balance sheet, assets minus liabilities must always equal equity. In other words, what the business owns minus what it owes is equal to what the owner has invested in it. The balance sheet accounting equation reflects this.

The following items describe the Assets - Liabilities= Equity balance sheet accounting equation:

Assets are organised in groups according to their liquidity. Liquidity is determined by a company's ability to convert an asset into cash. The faster cash can be generated, the more liquid an asset is. Assets are divided into current and fixed. Current assets fall into the normal operating cycle of the business and are defined as assets that can be cashed within one year. In that time period, it is considered reasonable that cash used to purchase stock for sale will be converted back to cash by collecting receivables from customers. These assets are usually listed in terms of liquidity and include cash, bank accounts, accounts receivables and stock. Long-term assets tend to be those assets which cannot be converted within one year and will include fixed assets such as equipment, vehicles or buildings.

Liabilities are also organised according to the operating cycle. Amounts owed to creditors that have to be paid within a year are considered current and include credit card accounts, creditors, VAT other current liability accounts. Current liabilities are usually listed in the order of when they are due. Liabilities that extend beyond the year time frame are described as creditors due after one year and include long term liabilities such as notes and mortgages.

Capital and reserves (equity) are made up of the initial investment in the business and any retained earnings from previous financial periods that have been reinvested in the business. Capital and reserves always equal the net assets of the company.

To hide or display nominal codes on a balance sheet report:

  1. On the Company menu, click Preferences.

  2. In the Preferences dialog box, on the Company page, do one of the following before running a balance sheet report:



Clear the Use nominal codes check box.

Hide nominal codes on the balance sheet report.

Select the Use nominal codes check box.

Display nominal codes on the balance sheet report.

  1. Click OK.

In the Balance Sheet report, you can do the following:

  • Click a column heading to sort all report contents by that column.

  • Double-click a row to open the Transaction Detail by Account report for the account on that row. You can then double-click each line item in the newly opened report to open the original transaction forms associated with that account.

    Note: If you open a report and edit an underlying document, you need to refresh the report to see the effect of your changes. Click Refresh Report   Button Image on the toolbar or press F5.

When you move the mouse cursor over information that is linked to additional details, the cursor changes to a pointing finger. This indicates you can double-click that location to display associated information, such as opening the original transaction document.

To open this report, point to Company and Financial on the Reports menu, and then click Balance Sheet.

The following table provides links to topics that describe additional ways in which you can work with this report.

To learn how to

See this topic

Modify the appearance of the report.

Modify a report

Filter the report to focus on specific areas.

Report filter options: Balance Sheet

Export the report for further analysis.

Export a report to Microsoft Office Excel

Print the report.

Print a report

** Save the format of the report after you have customised it.

Save a report

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