statement of financial position

Question 1

describe non-current assets

Answer 1

Items owned for a period of more than one year.

Question 2

describe current assets

Answer 2

Items owned for a period of less than one year.

Question 3

describe working equity

Answer 3

The ability to pay short-term debts. money that a business can access immediately, rather than money that is tied up in investments or property

Calculated by:
current assets − current liabilities

Question 4

describe net assets employed

Answer 4

This is the value of non-current assets added to the working
equity figure (if positive – if working equity is negative it
will be subtracted from non-current assets).

Calculated by:
non-current assets +/− working equity

Question 5

describe non-current liabilities

Answer 5

Long-term debts of the business, e.g. bank loan, debentures etc.

Question 6

describe net assets

Answer 6

The overall value or worth of the business.

Calculated by:
net assets employed - non-current liabilities.

Question 7

describe equity and reserves

Answer 7

This shows how the business has been financed, e.g. the initial investments in the business (equity, shares, etc.), retained profits, etc. It should add up to the exact value of total net assets.