Banking Exam Question - What is Risk Provision for In-Balance Sheet Transaction? Complete Balance Sheet Knowledge

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Introduction - Balance Sheet

An balance sheet is a budgetary explanation that outlines an organization's advantages, liabilities and investors' value at a particular point in time. These three asset report sections give financial specialists a thought concerning what the organization possesses and owes, and in addition the sum contributed by investors. 

[Assets = Liabilities + Shareholders' Equity]

[Assets = Current Assets + Long Term Assets]

Assets

Following are consider in current assets

•     Cash and cash equivalents
•     Marketable securities
•     Accounts receivable
•     Inventory
•     Prepaid expenses

Long-term assets include the following:

•     Long-term investments
•     Fixed assets
•     Intangible assets

Liabilities

Current liabilities accounts might include:

• Current portion of long-term debt
• Bank indebtedness
• Interest payable
• Rent, tax, utilities
• Wages payable
• Customer prepayments
• Dividends payable and others

Long-term liabilities can include:

• Long-term debt
• Pension fund liability
• Deferred tax liability