Lesson 1, Chapter 3 Flashcards

(9 cards)

1
Q

What are the two main financial statements?

A

• Statement of Financial Statements

• Statement of Profit or Loss (SPL)

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2
Q

What are the statement of financial position (sfp)?

A

• Is a snapshot of a business’s financial position at a point in time.

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3
Q

What are the Statement of Profit or Loss (SPL)?

A

• Is a summary of the performance of a business, highlighting profits or losses that has been generated over a period (usually a year).

• The SPL calculates the profit or loss during a year by subtracting business expenditures from business income.

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4
Q

What are the Elements of the Financial Statements?

A

• Statement of Financial Position

• Statement of Profit or Loss

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5
Q

What are the Statement of Financial Position?

A

• Assets

• Liabilities

• Capital

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6
Q

What are the Statement of Profit or Loss?

A

• Income

• Expenditures

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7
Q

What are the Accounting Equation?

A

Capital = Assets - Liabilities

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8
Q

What is the Statement of Profit or Loss Equation?

A

• The Statement of Profit or Loss relates to the profit of a business, which we introduced when learning about income & expenditures

Profit = Income - Expenditures

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9
Q

What is the Net Assets Equation?

A

Net assets = assets - liabilities

Or

Net assets = capital

And:

Opening net assets

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