Discuss the need of preparing a balance sheet.

Explanation

The needs to arrange a record area unit given below.
1. It helps in determinant the character and value of assorted assets, like mounted assets, investments, current assets, etc. at the tip of associate degree accounting amount.
2. It helps in ascertaining the character and quantity of assorted liabilities like long run liabilities, current liabilities, provisions, etc., that a business owes.
3. It discloses necessary data concerning capital endowed during a business. the extra capital endowed throughout the accounting amount, drawings of the homeowners and profit (or loss) additional to (or subtracted from) the capital of the business.
4. It helps in assessing the financial condition of a business.
5. It discloses actuality monetary position of a business at a selected purpose of your time. 6. It lays down the premise for maintaining new books for next accounting amount.