MINISTRY OF OBLIGATIONS |
| DIRECTOR Lavanya Kis |
ABOUT
In examining this new balance-sheet, the reader will have remarked that, in point of fact, each account represents the concern itself under different aspects, the debtor side forming an inventory of property so digested as to show at once what and where the several heads of property are, and the creditor side exhibiting the nature and amount of the demands upon the concern. The account of bills payable, for example, shows the amount which the concern is bound to provide for the satisfaction of claims which will be brought against it for actual payment; the account of consols shows the sum of money which the proprietor has embarked in this particular undertaking; and the account of profit and loss points out the amount of advantage he has derived from his transactions, provided all the accounts on the debtor side should realize the sums standing against them.
Another view suggested by this analysis of the new balance-sheet is, that although it may seem at first sight indifferent whether a man is his own debtor or his own creditor, since, in either case, he has no actual payment to provide for ; yet in reality it makes an important difference to a trader at his stock-taking, whether he finds the account of profit and loss standing at the debtor or the creditor side of his balance-sheet; since on the debtor side it indicates the absence or destruction of property, and on the credit side it indicates the absence or destruction of obligation.