Accounting is a system for collecting, summarizing, analyzing and reporting, in monetary terms, information about an organization. The final product of business accounting software is the financial statements that consist of the balance sheet, the profit and loss account, and the statement of changes in financial position. These statements are, therefore, the source of information from which conclusions can be drawn about the operations of a company. The analysis and interpretation of the financial statements would depend on the nature and type of information available.
When it comes to business accounting software, the balance sheet is an important financial statement of a business. In fact, it is called a fundamental accounting report. Other terms to describe this financial statement are statement of financial position or statement of position. As the name suggests, the balance sheet provides information about the financial condition of a business at a particular time. It can be viewed as a snapshot of a company’s financial status. The financial situation of the company is valid only for one day, the reference day. In a day before or after, it will surely be different.
The financial position of a company as revealed by the balance sheet of its resources and obligations and the interest of its owners in the business. In operational terms, the balance sheet contains information on assets, liabilities, and stockholders’ equity. It can be submitted in either of two forms: account form or report form. It is usually presented in the form of an account. A tiered balance sheet is prepared in the report form, listing assets at the top, followed by liabilities and share capital. The content of the balance sheet, in whatever form it is presented, consists of the assets of the company and the means by which they have been financed, that is, liabilities and stockholders’ equity.