Learning Accountancy Easily: Find Here The Basics You Need To Know

Continuing to learn accounting without any pain…

This time we will understand the concept of a balance sheet. This we shall learn with the help of a story. Shishupala and Lord Krishna

Shishupala was an extraordinary child. He was born with four arms and three eyes. The parents were reluctant to accept him as their child. Akashwani assured them both that his two arms and one eye would disappear once he sat in the lap of a person who, in the future, would be responsible for his death.

All the kings in the vicinity were called, and the child was made to sit on their laps. Lord Krishna and Balrama were also invited.

Lord Krishna was the nephew of Shishupala’s mother. Hence, they were cousins. When Shishupala was made to sit in the lap of Lord Krishna, two of his arms disappeared, and one eye too.

When the mother saw this, she started weeping. Lord Krishna saw all this and promised her that he would forgive the hundred sins of Shishupala and would not kill him till he crossed the hundred sin limit.

Now the balance sheet of Shishupala was as follows:

Assets                                                                               Liabilities                              Capital

1:100 lives                                                                          Nil                                           100 lives.

It is important to mention that Shishupala in earlier births was born as Hirnyakashayap and was killed by Lord Krishna.

The head of the Pandavas, Yudishtir, organised the famous Rajsuaya Yagna, and all the kings were invited to that. Shishupala was also an invitee.

When Shishupala saw Lord Krishna, he started hurling abuse at him. At every successive abuse, the balance sheet of Shishupala kept changing as follows:

The same thing happens in business: profit raises the assets and reluctantly increases the capital, while loss reduces the assets as well as the capital.

The same thing happens in business: profit raises the assets and reluctantly increases the capital, while loss reduces the assets as well as the capital.

• 10 lives were lost earlier. Not learning from his deeds, he continued with his nuisance and lost another 40 lives.

The same thing happens in business: profit raises the assets and reluctantly increases the capital, while loss reduces the assets as well as the capital.

• 50 lives were lost earlier. Not learning from his deeds, he continued with his nuisance and lost another 50 lives. Now he has no capital in hand to continue with the business. He is now bankrupt.

On hearing the 101st abuse, Lord Krishna took up his Sudershan Chakra, cut off his head, and caused his immediate death. The same happens with business, too. Once you neglect the losses and take no remedy to cure them, the business is lost forever.