Differences between Balance Sheet & Statement of Affairs
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| Balance Sheet | Statement of Affairs | |
| 1. | It shows the true financial position of an organization. | It does not show the true positions of an organization. |
| 2. | It is prepared at the final stage of accounting procedure. | It is prepared even before the preparation of the statement of profit. |
| 3. | It is prepared to show the assets and liabilities of the business. | It is prepared to know the opening and closing capital. |
| 4. | It is a basis of double entry | It is prepared under single entry. |
Evaluation Questions
1. List two (2) limitations of single entry
2. Prepare statement of affairs.
3. Convert single to double entry.
4. State the differences between balance sheet and statement of affairs.
5. Odun Ltd. Keeps his books on a single entry basis and the following information relates to his business for the year 2014.
In addition, Odun withdrew an amount of GC¢ 500 and introduced GH¢200 additional capital.
- You are required to ascertain:
(i) Opening Capital
(ii) Closing Capital
(iii) Net Profit
- Prepare the Balance sheet as at 31st December, 2014.
(WASSCE JUNE, 2015)
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