Balance sheet day, otherwise known as accounting day, is a term used in finance to denote the date by which taxes must be accounted for. It covers the period from January 1 to December 31 of each year. The balance sheet day is important for companies and businesses due to the fact that most of them have to settle their taxes according to this date. Therefore, the balance sheet day may also be called the annual day or accounting day.
Balance sheet day – what is it?
The balance sheet day is a specific day of the year on which every businessman can value his assets and liabilities. It is a very important tool for all entrepreneurs, as it allows them to accurately determine the financial state of their company. The balance sheet day usually takes place on the first day of the month or on the day the business ends. It is worth knowing that all activities that an entrepreneur performs should be included in the balance sheet.
Assets include all tangible goods that a company has at its disposal. These can be both goods and services. They can also be real estate, which is owned by the entrepreneur. All these assets are determined as of the balance sheet date.
Liabilities include all liabilities and receivables that a given company has. They also include all debts and loans that it has taken out. All these liabilities and receivables must be valued as of the balance sheet date.
The balance sheet date is very important for any business. This is because it allows to determine what the financial state of a given company is. The entrepreneur can thus determine exactly how many assets he has and what liabilities he has assumed in a given period.
When does the balance sheet day most often occur?
Balance sheet day – according to the Accounting Act of September 29, 1994, the day on which the entity prepares financial statements (most often this day is December 31, when the fiscal year coincides with the calendar year).
source: wikipedia.org
