Give Answer As Asked . (3 Marks)

Question

Explain the difference between Statement of Affairs and Balance Sheet.

Vidyadip · Accepted Answer

The difference between statement of affairs and Balance Sheet:

Points	Statement of Affairs	Balance Sheet
$1.$ Basis	This statement is prepared by balances and estimated values from incomplete records as per single entry system.	This statement is prepared from the account of complete records and from the amount of systematic records of double entry system
$2.$ Trial Balance	Trial balance can't be prepared in single entry system. Hence arithmetical accuracy can't be verified.	Before, preparing this statement, arithmetical accuracy can be verified by preparing trial balance.
$3.$ Financial Picture of business	A clear picture of the actual financial position of business cannot be ascertained from this statement.	This statement shows true and fair view of financial position of business.
$4.$ Trustworthy	In this system, information is estimated, so it is not trustworthy.	In this, system, information is fixed, so it is trustworthy.
$5. $ Comparing	In this, statement is not possible to compare with last year or any business statement.	In this, statement is possible to compare with last year or any business statement.
$6.$ Objective	To prepare this statement the objective is not find capital and profit-loss.	To prepare this statement the objective is to know the financial position of business.
$7.$ Information	In this statement, the information about the financial position of business may not be complete.	In this statement, the information or particulars are complete.

Balances of Acconts	Amt. (Rs.)	Balances of Accounts	Amt. (Rs.)
Match Fund	$70,000$	Interest on match fund investment	$4,000$
Investments of Match fund	$35,000$	Donation received for match fund	$16,000$
Prize distribution to match winners	$5,700$	Permanent fund	$1,05,000$
Match Expense	$8,250$	Investments of Permanent fund	$1,05,000$

Answer