of the balance sheet, in theoretical aspect we have to review the concepts in accordance with which it is built up. Since it is an accounting document, obviously, we would have to find out the application of the basic accounting principles in it. Further to this we can deffinitely state that the balance sheets is in complince with all of the basic accounting principles and concepts.Let us review some of the most obvious principles that can be referred to the balance sheet:The entity principle: as in all accounting documents in the balance sheet an enterprise is presumed to exist in its own right. It is therefore treated as a separate entity from the person or persons who own or operate it and in no way reflects their assets or liabilities. The same applies equally to organizations that are not commonly referred to as businesses (charities, clubs, etc.).The money-measurement concept: obviously everything shown on the balance sheet is measured in money, all pointers that cannot be expressed in monetary terms, being left aside;The cost principle: I would classify this one as may be the most contradictory principles not only in the financial statements but in the accouning itself. I can even add that it is the reason for some of the negative aspects of the balance sheet. In spite of the different ways in which assets can be valued the accountants have traditionally used the historic cost as the basis of valuation of assets in the balance sheet, assuming that the enterprise is a "going-concern", and taking into consideration the need for objectivity.Periodicity principle: being a document, showing the financial position of a firm on a given date, by its very nature the balance sheet has to be drawn at a some periods of time, so there is no way for it not to comply with this principle.As already mentioned the balance sheet can be easily referred to and found in complience with any other concepts like the accrual concept, the duality concept, ...
