1. Balance Sheets Assets = Liabilities + Owner’s Equity

2. Balance Sheet The Balance Sheet reports the figures of the Accounting Equation Assets = Liabilities + Owner’s Equity OwnOweOwe to othersthe owner

3. Balance Sheet Assets Bank Equipment Debtors (owe business money) Stock (for sale) Liabilities Overdraft Loan Owner’s Equity Capital (What the owner put into the business) Net Profit Drawings (What the owner takes out of the business

4. Balance Sheet The Total Assets must equal the Total Equities (Liabilities + Owner’s Equity)

5. Classifying Revision Put a whole stack of items and we do the classifications again.

6. GST Payable Businesses collect GST from customers and pay GST to suppliers. If GST Collected from customers is greater than GST Paid to suppliers then the business owes money to the Australian Tax Office. This is called GST Payable and is a Liability.

7. How GST Payable is calculated Statement of Receipts and Payments Bank at beginning2,000 Receipts Fees6,000 GST Collected 6006,600 Less Payments8,600 Wages1,000 Rent1,500 GST Paid 1503,000 Bank at end5,600 GST collected 600 less GST Paid 150 = GST Payable 450

8. GST Refund Businesses collect GST from customers and pay GST to suppliers. If GST Collected from customers is less than GST Paid to suppliers then the Australian Tax Office owes money to the business. This is called GST Refund and is an Asset.

9. How GST Refund is calculated Statement of Receipts and Payments Bank at beginning2,000 Receipts Fees2,000 GST Collected 2002,200 Less Payments4,600 Wages1,000 Rent2,500 GST Paid 2504,000 Bank at end 600 GST collected 200 less GST Paid 250 = GST Refund -50

10. Balance Sheets last for years The Assets or Liabilities or Owner’s Equity from one year will be carried forward to the next. The business buys new assets and some times sells them. A Loan is received and must be paid back. The owner puts money into the business (Capital) and takes some out (Drawings)

11. Balance Sheet First Year Assets Bank1200 Equipment1500 Debtors3000 Stock9000 Supplies1300 15000 Liabilities Loan 9000 Owner’s Equity Capital 5000 Net Profit 3000 Drawings 2000 6000 15000

12. Balance Sheet Second Year Assets Bank1000 Equipment2000 Debtors1200 Stock7000 Supplies1800 13000 Liabilities Loan 5000 Owner’s Equity Capital 6000 Net Profit 4000 Drawings 2000 8000 13000

13. Balance Sheet Third Year Assets Bank7000 Equipment3000 Debtors1500 Stock2500 14000 Liabilities Owner’s Equity Capital 8000 Net Profit 8000 Drawings 2000 14000 14000

14. Classify items from Statement of Receipts & Payments into Into the Profit & Loss Statement Revenue Less Expenses Into the Balance Sheet Asset = Liabilities + Owner’s Equity OR

15. Open “How to prepare a Balance Sheet”

17. Open Income to Balance Sheet