Statement of Financial Position Format

Statement of financial position format
The following statement of financial position has been submitted to you by an inexperienced bookkeeper. List your suggestions for improvements in the format of the statement of financial position. Consider both terminology deficiencies as well as classification inaccuracies.

Note 1. The reserve for contingencies has been created by charges to earned surplus and has been established to provide a cushion for future uncertainties.

Note 2. The inventory account includes only items physically present at the main plant and warehouse. Items located at the company's branch sales office, amounting to $30,000, are excluded since the company has consistently followed this procedure for many years.