first 7 pages Flashcards
assets
what can it be classified as?
what is non current assets + what is problem?
what are current assets
things that belong to business
classified : current and non current assets
non current assets = things business likely to keep for more than 1 year e.g property, car, machines
- lose value overtime called decipration
current assets= things business will exchnage for cash within accounting year includes inventroy and recieveables
liabilities
what is current liability?
what is non current liability?
money the business owes
current liabiltiies = have to be paid off within a year ( overdrafts, tax, paybles and dividend)
non current liabilites = business will pay off several years e.g mortage and loas
capital
money invested into the business
source of capital
where business get their money from
what two things are always same in balance sheet
net assests and total equity
inventories
raw material business bought but has not sold
recieveables
money owed to the business
payables
money the business owes
dividends in income statement
has not been paid to shareholder
net current assets
what is it?
how do you work it out
working capital ( money available for day to day spending)
current assests - current liabilities
reserve
takes into account decipration
how do you workout net assets and total equity
net current assets + non current assests - non current liabilites
what is “bad” debt?
when debtor dont pay money to the businesses
they can be included as assets because business will not recieve money from them
- put on as expenses on profit and loss it to show they lost money
what does a bracket mean in balance sheet?
Bracket means negative number
