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Article Directory » Business and Industry » Accounting
| Balance Sheet Definitions |
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| Written by NPSIS.com: Jason Klein |
| Monday, 22 September 2008 21:09 |
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The statement of financial position or balance sheet, records all the assets, liabilities, and owner's equity of a website hosting business as of a specific date. A balance sheet is typically segmented into two sections. The top section deals with the entire website hosting business' assets while the bottom section records the liabilities and equity.
The statement of financial position or balance sheet, records all the assets, liabilities, and owner's equity of a website hosting business as of a specific date. A balance sheet is typically segmented into two sections. The top section deals with the entire website hosting business' assets while the bottom section records the liabilities and equity. A website hosting business' assets generally include everything the website hosting business owns that has any monetary value. The assets are broken down into categories based how liquid the asset is and how fast it can be sold and converted to cash. Current assets are those assets which can be converted to cash within one year. Website hosting company liabilities consist of expenses and debts that the business has incurred such as the interest from the financing for database software such as PHP, mysql or Microsoft SQL or for new updated hardware such as dedicated servers or for the lease payments for a office or datacenter. 1. The dedicated servers pointed out above are assets of the website host whereas the loan for their purchase is a liability. 2. Accounts payable such as advertising with MSN or other website marketing would be categorized under current liabilities. 3. Liabilities should also account for revenue rthat is received for prepaid services. 4. You can construct a balance sheet utilizing a free program named Calc from OpenOffice.org. If you want an uncomplicated way to calculate the equity in a business simply subtract all liabilities from the value of all assets. The formula of adding all liabilities plus the equity should be equal to the total of all assets. The two sections of the statement should be equal or balance. About the Author: Are you getting the results you desire? We trust that the organizational help article was informative; we welcome you to visit us and get more detailed internet marketing, website design and website hosting advice and solutions for your business! |