Balance Sheet presents the financial position of a business at a specific date. Structure: Assets on right side, Liabilities and Capital on left side (in some formats), or Liabilities subtracted from Assets equals Capital. Classification: Current Assets (cash, receivables, inventory expected to convert in one year); Fixed Assets (property, plant, equipment used long-term); Intangible Assets (goodwill, patents, trademarks); Current Liabilities (payables due within one year); Long-term Liabilities (loans, debentures repayable after one year); Capital and Reserves. Equation: Assets = Liabilities + Capital. Capital calculation: Opening Capital + Net Profit - Drawings = Closing Capital. Drawings are withdrawals by proprietor; they reduce capital. Balance Sheet equation must balance; if not, reconciliation is needed. Assets shown at cost less accumulated depreciation (net book value) for fixed assets; at lower of cost or NRV for inventory. Liabilities shown at amount payable. Current vs non-current distinction important for liquidity analysis. Balance Sheet must be prepared as per Schedule VI (Companies Act) or Revised Schedule VI for IND AS compliance. Exam tip: Master the Balance Sheet structure and classification of items; practice calculating capital from opening balance, profit, and drawings; ensure equation balances; understand current vs non-current distinction.