What is an Account Form Balance Sheet?

Definition: The account form balance sheet is a financial statement format where the assets are reported on the left side and the liabilities and equity are reported on the right side. The account format is kind of a visual representation of the accounting equation.
The assets are listed on the left alone. The liabilities and owner’s equity are added together and listed on the right. Both the left and right sides are totaled at the bottom of the report and must always equal each other. Just like the accounting equation (assets = liabilities + owner’s equity).

What Does Account Form Balance Sheet Mean?

The account format is not the only acceptable way to present a balance sheet, however. The report format vertically aligns the asset, liability, and equity accounts with the descriptions on the left and the account totals on the right.

Although both presentation formats are acceptable for GAAP purposes, companies and accountants usually prefer the report form balance sheet because it’s easier to read especially when multiple comparative years are presents. The vertical arrangement of the report form can easily report both years side by side.

This doesn’t mean the account form isn’t used though. Many financial statement users prefer this presentation because it separates the assets more clearly.


Let’s take a look at an example balance sheet.

Account Balance Sheet Example

As you can see, the account form lists all of the assets in order of liquidity on the left side. First current assets are presented followed by the non-current assets with a total at the bottom.

The liabilities are listed and totaled on the right hand side and followed by the equity accounts. Notice that both liabilities and equity are totaled individually and then combined. The combined liabilities and equity total must always equal the assets total on the left as per double entry accounting.

error: Content is protected !!