Balance sheet Flashcards
What is a balance sheet?
A snapshot in time of a companies financial positionat any given point in time, shows net worth and overall financial health by recording assets, liabilities and shareholders equity.
What is meant by assets and liabilities?
Assets - like buildings land, equipment etc owned by a company
Liabilities - a loan or a debt that a company owes
What are current assets?
A short term asset that a company expects to use up, convert into cash or sell within one fiscal year
What are fixed assets?
Resources purchased for long term use in the business and not likely to be sold within 12 months.
Fixed assets are usually used by a business to generate income, they may also be referred to as property, plant or equipment and recorded like that on a balance sheet
What is the difference between creditors and debtors
Creditors are owed money
Debtors have borrowed money
