What Are The Objectives Of Preparing Balance Sheet?
Principal Objective: The main purpose of preparing balance sheet is to know the financial position of the business at a particular date. Subsidiary Objectives: Though the main aim is to know the exact financial position of the firm at a particular date, yet it serves other purpose as well. It gives information about the actual and real owner’s equity. Though the capital of the owner indicates owner’s equity, yet some other liabilities are to be accounted for against it also. It helps the firm to make provisions against possible future losses. A provision is made in the form of the Reserves.
