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Level 79

Statement of Financial Position

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Non Current / Fixed Assets
What a business owns for longer than one year. Things you can touch or feel. For example equipment or buildings
Current Assets
What a business owns for less than one year and is easy to turn into cash. Includes Stock, money in the bank, cash and debtors.
Long Term Liabilities
What a business owes for longer than one year. For example a large loan.
Current Liabilities
What a business owes for less than one year because they must pay it back quickly. For example money owed to creditors or a short term loan like an overdraft.
Capital / Equity / Shareholders funds
Money owed to the businesses shareholders (i.e investors) including retained profits (net Profit).
Net Profits
Profits made by the business. It is the owners /investors money and is therefore added to the opening capital.
Money invested into the business by owners/investors.
Creditors (trade Payables)
Suppliers that the business owes money because they have bought stock from them on credit (not paid for the stock yet)
Money that the business owes to the bank
Capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity).
an institution for receiving, keeping, and lending money
Debtors (trade Receivables)
Money owed to the business by its customers. Customers owes money because that have bought products/services from the business, but have yet to pay for them.
The value of buildings owned by the business
The value of equipment owned by the business
Accounts receivable, what others owe to you
amounts owed; the legal claims against a business or household by non-owners; the sources of funds for financial intermediaries
What the business owners takes out for their own personal use. This money is deducted from the capital/equity
Purpose of a balance sheet
To provide a snapshot of how much the company owns and owes in the end of a period (usually one year).
Opening capital
Money owed to the owners/shareholders in the beginning of a period. Part of this would be what the owners have initially invested.
Closing Capital
Is the money owed to the owners or shareholders in the end of a period. Part of this would be the money the owners have initially invested, Net profit for the year and drawing…