Things You'll Need:
- General Ledger Accounts
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Step 1
Indicate the date on the balance sheet at the top along with the name of the company if the report is being prepared for a business.
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Step 2
Create a separate section for each type of asset and liability. Include all of the accounts recorded in the company's General Ledger.
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Step 3
List assets down the left-hand column of the sheet. The total should equal the sum of the liabilities and net worth entries recorded down the opposite right-hand column. The figures entered into the two sides of the report must balance. Some reports deduct the total liabilities from the total assets to show the net worth. In the case of a business, net worth may also be referred to as owner or shareholder equity.
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Step 4
Record every transaction twice, both as an asset and as a liability. By recording a transaction as a credit and as a debit, the double entry bookkeeping system makes it easier to detect errors.
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Step 5
Use subheads to further describe the types of assets and liabilities. For example, assets may include current and fixed assets such as cash and accounts receivable, investments, real estate, equipment, and inventory. Current assets can be converted into cash within one year, whereas fixed assets are depreciated over time. Liabilities usually include current and long-term liabilities like accounts payable, employee wages, bank loans, and long-term financing.
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Step 6
Arrange assets according to how quickly they can be liquidated into cash. Enter liabilities on the worksheet in the order in which they must be repaid. Amounts owed to creditors that must be paid within 30 days usually appear first.
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Step 7
Calculate net worth once the assets and liabilities sections of the balance sheet have been completed. Net worth is what is left over, and should equal assets minus liabilities at the end.
