The Balance Sheet as distinct from other financial statements has the following characteristics:
It is a statement and not an account. Although balance sheet is a part of the final accounts and prepared with the help of accounts, yet it is not an account but a statement.
It is always prepared on a particular date, and thus shows the position at that date and not for a period.
It has no debit side and credit side. Nor the words ‘To’ and ‘By’ are used before the names of the accounts shown therein. The headings are Liabilities and Assets.
It shows the financial position of the business concern.
It shows what the firm owes to others and also what others owe to the firm.
The totals of Liabilities and Assets always are equal.