How To Prepare a Balance Sheet for Non-Corporate Entities

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What will be Covered in the Course?

Understand the Basic Structure

• A Balance Sheet shows the financial position on a given date and is divided into:
• A. Liabilities
• Capital / Owner’s Equity
• Drawings (deducted from capital)
• Loans (secured/unsecured)
• Sundry Creditors
• Outstanding Expenses
• Other Liabilities (e.g., taxes payable)

B. Assets

• Fixed Assets (Land, Building, Plant, Furniture)
• Current Assets (Cash, Bank, Stock, Debtors)
• Loans & Advances (given)
• Prepaid Expenses
• Other Receivables

Key Steps to Prepare the Balance Sheet

• Step 1: Prepare a Trial Balance
• Start with a trial balance as on the reporting date. It includes all debit and credit balances.
• Step 2: Prepare Profit & Loss Account
• This gives the net profit or loss, which is adjusted in the capital account on the balance sheet.
• Step 3: Prepare the Balance Sheet
• Classify each ledger into Assets or Liabilities.
• Adjust capital with net profit/loss and drawings.
• Include depreciation on fixed assets, if applicable.

Capital Account Presentation (Non-Corporate)

• Opening Capital
• Net Profit for the year
• Drawings
• Closing Capital (shown on liabilities side)

Format Example (Vertical)

• Balance Sheet as at [Date]

Points to Remember

• No Schedule III compliance required, unlike companies.
• Balance Sheet format can be vertical or horizontal (T format).
• For tax audit, details are needed under Form 3CD – Clause 9.
• For NGOs/Trusts, refer to Income & Expenditure Account and Receipts & Payments Account, along with the Balance Sheet.

Tools for Preparation

• Tally / Busy / Zoho Books
• Excel templates
• Customized GPTs for balance sheet generation (can be built using Open AI API)