Accounting Report

Chapter 1 The balance sheet

1.1. Theoretical considerations

The balance sheet is a basic tool of financial accounting, which is reflected in the expression value, at a given moment (the end of the financial year) the existence of property items and the net result obtained by persons.

By balance, is respecting the fundamental principle of accounting, namely “The principle of double representation” of property items - first in balance-sheet assets and on the other hand in the balance-sheet liabilities.

The Assets are characterized by:

- recovery - explaining how many times a item property participates in one or more cycles of operation.

- liquidity – which represents expressions in cash, money etc, of items property.

In the balance-sheet assets in Romania, the property items are recorded in reverse order of their liquidity (from most to least liquid ones which appear in cash

Liabilities balance-sheet is characterized by:

- funding source - own or foreign

- degree of chargeability (the settlement, the payment of a debt).

1.2. The balance sheet for a fictions (dummy) company at 30.06.2009

SC ALFA SA is recording the following information in the balance sheet:

- subscriptions paid in 2006 corresponding to 2007 – 500 lei

- capital – 25000 lei

- cash deposit – 2900 lei

- rent received in advance for the first 6 months of 2007 – 900 lei

- buildings – 14000 lei

- customers – 1800 lei

- bank loans in the long term – 2800 lei

- raw materials – 1800 lei

- suppliers – 2200 lei

- goods – 1000 lei

- provisions – 600 lei

- reserve – 1500 lei

- lands – 11000 lei

SC ALFA SA

BALANCE SHEET

30.06.2009

ASSETS AMOUNT LIABILITIES AMOUNT

I. Fixed assets

1.Intangible assets

2.Tangible

- buildings

- lands

3. Financial fixed assets

0

14000

11000

0 I. Equity

- capital

- reserve

II. Provisions

- provisions

III. Debt

- suppliers

- bank loans in the long term

IV. Revenue in advance

-rent received in advance

Total of Fixed assets 25000

II. Circulating assets

1. Stocks

- raw materials

- goods

2. receivables

- customers

3. financial investment in the short term

4. cash deposit and bank accounts

- cash deposit

1800

1000

1800

0

2900

Total of Circulating assets 7500

III. Expenses in advance

- subscriptions paid in 2006 corresponding to 2007

500

TOTAL ASSETS 33000 TOTAL LIABILITIES 33000

1.3. The analytical structure of: liability, claims, raw materials, consumables, tangible assets, etc

The Assets includes :

I. Fixed assets

1.intangible assets which includes:

-costs of establishing

-costs of development

-concessions, patents, licenses

-other intangible assets

2. tangible assets:

- lands

- arrangement of land

- constructions

- machines

- installation work

- animals

- plantations

- plantations

- office equipment

3. Financial assets

- fund units

- securities portfolio of activities

- receivables immobilized

I. Circulating assets

1. Stocks

- raw materials

- consumable materials

- material nature of objects in the inventory

- products

- young animals

- goods

- packaging

- hutments and provisional arrangements

- production running

2. Receivables

- Customers

- Care-providers

- settlements associations with capital

- various debtors