- The first column itemizes all of the asset line items for which there are ending balances,
- Followed in the next column by the numbers associated with those assets.
- The third column lists all of the liability line items and then the equity line items for which there are ending balances,
- After which the fourth column states the numbers associated with these liabilities and equity items.
The total for all the assets in the second column should match the total for all the liabilities and equity items in the fourth column.
The horizontal balance sheet works best when there are a number of line items to be presented, since the presentation format allows for additional line items. If there are fewer line items to be presented, it is more common to present the balance sheet in the vertical format, where the asset, liability, and equity line items are all clustered into a single column. In order to switch from the horizontal mode of presentation to the vertical mode, it may be necessary to consolidate some of the line items in the horizontal mode of presentation.
It is difficult to expand the horizontal format to present the financial position of a business for more than one period, since additional periods will take up so much space that the presentation becomes difficult to read, given the small font sizes that must be used. Consequently, in cases where the financial position of multiple periods must be presented, it is customary to adopt the vertical balance sheet format, where there is more space for additional columns.
Both the horizontal and vertical formats are acceptable forms of presentation.