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Flashcards in Balance Sheets Deck (14):

What is a balance sheet?

A document describing the financial position of a company at a certain point by looking at the assets,capital and liabilities
-comapres the amount owned by the amount owed


How do you calculate Net Current Assets?

Current assets-current liabilities


How do you calculate Net assets?

total assets - total liabilities


How do you calculate capital employed?

total equity + non current liabilities


What are liabilities?

Debts owed by the business to the suppliers and shareholders


What is equity?

funds provided by the shareholders to set up the business,fund expansions and purchase assets


what is net current assets?

how much money a business has available in the short term


what are trade receivables?

money you receive from trading with customers


what are trade payables?

money you pay to suppliers having received the trade credit


What are tangible assets?

Non current assets that exist physically


what are intangible assets? example?

Non current assets that don't have a physical presence but still have a value
Common example is goodwill which includes the value of a firms brand name


whats meant by the term amortisation?

This is the depreciation of intangible assets


Whats the difference between non current and current assets?

Non current assets are what a business owns with a lifespan of over 12 months and are used repeatedly e.g machines

Current Assests are owned by a business for less than a year than are likely to be turned into cash e.g inventories


What are current liabilities?and long term liabilities?

Short term debts of the business that have to be repaid within a year e.g over drafts
Long term liabilities are debts that need to be repaid but not within one year (also known as creditors)