Ch.22- Statement of financial position

Question 1

Statement of financial position

Answer 1

An accounting statement that records the assets, liabilities and owners’ equity of a business at a particular date

Question 2

Assets

Answer 2

Resources that are owned by a business

Question 3

Liabilities

Answer 3

Debts of the business that will have to be paid sometime in the future

Question 4

Non-current (fixed) assets

Answer 4

Resources that a business owns and expects to use for more than one year

Question 5

Current assets

Answer 5

Resources that the business owns and expects to convert into cash before the date of the next statement of financial position

Question 6

Trade receivables

Answer 6

The amount of money owed to the business by customers who have been sold goods on credit

Question 7

Current liabilities

Answer 7

Debts of the business which is expects to pay before the date of the next statement of financial position

Question 8

Trade payables

Answer 8

The amount of money a business owes to its suppliers for goods bought on credit

Question 9

Non-current liabilities

Answer 9

Debts of the business which will be payable after more than an year

Question 10

Owner’s equity

Answer 10

The amount owed by the business to its owners; includes capital and retained profits

Question 11

Shareholders’ equity (funds)

Answer 11

alternative term for owner’s equity, but can only be used in limited liability companies