ACCRUAL-BASED FINANCIAL STATEMENTS: CONSIDERATIONS OF THE BALANCE SHEET

Within a financial statement, the balance sheet should be classified, separating current assets and liabilities from long-term assets and liabilities.  Current amounts include anything that is expected to be converted into cash within a year.

In reviewing the balance sheet, items to consider include:

• Whether all receivables are collectible
• Whether the value of inventory is overstated due to obsolescence
• Whether all amounts owed are reflected as liabilities

Davis & Hodgdon Associates CPAs has technical staff ready to assist you with the organization of your balance sheet!  Call 802-878-1963 or visit www.dh-cpa.com for details.