CBSE Class 11-commerce Answered

• Meaning: Balance Sheet or the Position Statement shows the financial position of a business by providing complete details of its Assets, Liabilities and Equity at a particular date.

• Equity: A liability towards the shareholders is termed as ‘Equity’ or 'Shareholders’ Funds’. Equity includes Share Capital, Money received against Share Warrants. 
• Liabilities: It is a liability towards the outsiders/external parties. It is shown as Non-Current Liabilities and Current Liabilities.

                      i.    It comprises of balances of all the assets, liabilities and owner’s equity. 

                     ii.    It considers opening balances, transactions during the year and closing balances for the items appearing in the Balance Sheet. 

                    iii.    It satisfies the accounting equation of Assets = Liabilities + Owner’s Equity.

                   iv.    It gives a true picture of the financial position of an entity on a particular date.