The Total solution for NCERT class 6-12
Difference between Statement of Affairs and Balance Sheet
┬а
Basis of Difference
Statement of Affairs
Balance Sheet
Objective
It is prepared to determine the amount of capital at a particular date.
It is prepared to ascertain the true financial position.
Reliability
It is based on estimates; hence, it is less reliable.
It is based on sophisticated and well developed principles; hence, it is more reliable.
Accounting Method
It is prepared from incomplete records of business transactions under single entry system.
It is prepared when accounts are maintained under double entry system.
Omission
Omission of assets and liabilities┬аcannot┬аbe easily identified.
Omission of assets and liabilities can be easily identified, as omission will lead to mismatch of either sides of the balance sheet.