CLASSIFICATION" OF LEDGER ACCOUNTS FOR CREAMERIES. 33 



BALANCE SHEET. 



After closing the Expense and Income accounts into Loss and Gain there will re- 

 main in the Ledger the Asset, Liability, Reserve, and Net Worth accounts, which are 

 the Balance Sheet accounts. As has previously been stated, the Assets accounts 

 should be arranged on the left-hand side of the Balance Sheet in the order of their 

 probable cash realization and the Liabilities and Net Worth accounts arranged on the 

 right-hand side in the order of their probable priority as to liquidation. The purpose 

 of the Balance Sheet is to present the assets and liabilities of the organization in con- 

 crete form and reveal the net worth as at a certain time. It is one of the most impor- 

 tant statements to be prepared and should show by comparison with former similar 

 statements, the financial progress of the organization. 



The following form of a Balance Sheet is reco mm ended as a model to be used in 

 preparing these statements. Attention is invited to the fact that while the Ledger 

 shows the various reserves for depreciation as a credit balance, they are shown on the 

 Balance Sheet as a deduction from assets, and also that while good will may be con- 

 sidered as an intangible asset, it is shown on the credit side of the Balance Sheet as a 

 deduction from the Net Worth accounts. This procedure is in conformity with th e 

 recommendation of the Federal Reserve Board. 



