Statement of Financial Position Flashcards
(11 cards)
What is the purpose of a Statement of Financial Position ?
The Purpose of a Statement of financial position is to see what the business owns, owes and what the business is worth.
What Are NOn-Current Assets ?
Non CUrrent Assets are items which the business owns and will have in the business for many years. Their value will stay constant for at least 1 year. Property and land
What are current Assets ?
Current Assets are items which belong to the business but their value will constantly change. Trade receivables and inventory.
What are trade receivables ?
Trade receivables are customers who owe money to the business at the end of the year.
What are trade payables ?
Trade Payables is money the business owes to suppliers.
What is an asset ?
This refers to items which the business owns
What is a liability ?
This refers to the amount the business owes
What are current liabilities?
This refers to the amount the business owes which will have to be repaid within a year
What are Non-Current liabilities ?
This refers to amounts that we owe which will take years to repay. Loan and mortgage.
What is Equity ?
Equity refers to the investment in the business by the owner.
What are drawings ?
Drawings refers to money taken out of the business by the owner
