5.4 Statement of financial position

Question 1

Define assets.

Answer 1

items of value owned by the business like buildings, vehicles, equipment, machinery.

Question 2

Define liabilities.

Answer 2

debts owed by the business, like bank loans or bills that must be paid.

Question 3

Define current liabilities.

Answer 3

debts which must be paid within the next year, for example a bill which must be paid to a supplier within one month

Question 4

Current liabilities is also known as ______.

Answer 4

Accounts payable

Question 5

Define accounts payable.

Answer 5

debts owed by a business which must be paid.

Question 6

Define non current liabilities.

Answer 6

debts which will last longer than one year, like a long term loan for new production machinery.

Question 7

Define non current assets.

Answer 7

items of value the business will keep longer than one year, for example land, buildings, equipment and vehicles.

Question 8

Define current assets.

Answer 8

items of value that the business won’t keep for longer than a year, like cash or inventory. Current assets also include sales that have been made but the business is still waiting for payment

Question 9

Define trade receivables.

Answer 9

sales made by business, but still awaiting payment

Question 10

How do you calculate current assets?

Answer 10

Current assets – current liabilities = net current assets

Question 11

What is capital employed in a financial statement?

Answer 11

value of all long term finance invested in the business (shareholders funds and non current liabilities).

Question 12

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Question 13

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Question 14

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Question 15

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Question 16

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Question 17

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Question 18

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Question 19

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Question 20

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Question 21

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Question 22

Answer 22