The Balance Sheet Flashcards
On the Balance Sheet, what does Financing generally mean?
Can mean Liabilities, there was a change in terminology.
What are Non-current assets?
Long term assets that cannot be turned to cash quickly. Expected to be used for more than a year.
Example of non-current assets?
Property, equipment, financial investments etc.
What are Current Assets?
Three Main Catagories; Inventory, Debtors(receivables), Cash (or Financial Investmets). The companies inventory, goods for sale. Raw Materials, Cash, Debtors. Stuff that can be turned to cash quickly.
What are non-current liabiities?
Debts that have a term longer than 1 year.
What are current liabilities?
Debts that need to be repaid within 1 year. Overdrafts etc, that technically need to be repaid that year but could be rolled over. Could also be Payables/Creditors. and Tax/VAT. Tax sometimes paid in installments.
What are examples of Intangible Assets?
Goodwill, Licences, Patents. Things that are valuable to the business but hard to value specifically.
On the Financing side of the balance sheet, what are Shareholders Funds?
Equity! Basically everything that would be owed to the shareholders if the company were wound up: The original share equity plus all retained profits from previous years, etc.
What are Long-term Liabilities?
Debts/Bonds/Mortgages etc that have along term basis, more than 1 year.
What are Provisions on the Liabilities side?
Things the company will have to pay in the future such as pensions, decommissioning costs, clean-up costs etc. Check the Notes.
What is Creditors, Accounts Payable or Payables?
Suppliers of stuff to the organisation who have not taken payment yet. These are liabilities to be paid
What is Goodwill?
Could come from purchases of other businesses. When you purchase another business you gain some of the benefits that other business has. This is Intangible. Also could be the value of workforces knowledge base when bought/sold.
What is the balance sheet?
Basically a list of the assets and liabilities of a company. Liability can also mean financing. Should net out to zero. Hence balance sheet.
Give examples of tangible assets?
Land, Plant Equipment, Property.
What are receiveables?
Orders that you have not taken payment for yet. Trade Debtors
