Question

Which of the following balance sheet formats lists the assets on the left side of the page and the liabilities and stockholders' equity on the right side?

1) Vertical format
2) Horizontal format
3) T-format
4) None of the above

Answer 1

The T-account format is the balance sheet structure that lists assets on the left side and liabilities and stockholders' equity on the right, forming a T-shape.

Step-by-step explanation:

The balance sheet format that lists the assets on the left side of the page and the liabilities and stockholders' equity on the right side is known as the T-account format. This format features a two-column setup, creating a T-shape with the vertical line down the middle and the horizontal line under the column headings for “Assets” on the left and “Liabilities and Stockholders' Equity” on the right.

Assets include items of value that the bank owns, like cash or loans made to customers, whereas liabilities are obligations that the bank owes, such as deposits from customers. Stockholders' equity represents the net worth or bank capital, which is the difference between the total assets and total liabilities.