The format of the balance sheet consists of liabilities on one side and assets on the other sides. In some cases, the balance sheet is prepared in vertical format representing liabilities on top followed with assets. The visuals of balance sheet formats are given below for better understanding. Components of Balance Sheet As you can see in the balance sheet format, it consists of 2 broad components: Assets and Liabilities as discussed below: Assets Something that an entity has acquired or purchased and owned, regarded as having value and available to meet debts, commitments or legacies. Assets are further broadly classified as: Fixed Assets: Assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment. Current Assets: A current asset is an item on an entity's balance sheet that is either cash, a cash equivalent, or which can be converted into cash within one year. Examp...
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