5.4 Statement of Financial Position

Question 1

what is it

Answer 1

record of what comp owns and how it has paid for it @ any given time

• record of what bus owns/owes + finance sources used to pay for it
• doesn’t show profitability, only how much it’s worth/how much it owns

Question 2

it is balanced between…

Answer 2

assets & liabilities/equity

Question 3

what are assets

Answer 3

items/entries in a bus’ account that it owns

Question 4

non-current assets definition

Answer 4

large 1-off purchases expected to be owned for more than 1 year

Question 5

current assets definition

Answer 5

items bus owns but expects to use w/in 1 year

Question 6

what are liabilities

Answer 6

debt owed by a bus

Question 7

non-current assets def?

Answer 7

amounts of $ borrowed repaid over 1 year later

Question 8

current liabilities def

Answer 8

short term debts bus may have used to help its cash flow, paid w/in 1 year

Question 9

4 non-current asset

Answer 9

property
machinery/tech
fixtures/fittings
vehicles

Question 10

4 current assets

Answer 10

inventory (finished goods yet to be sold)
trade receivables
bank balance
cash in hand

Question 11

what’s equity?

Answer 11

finance that isn’t borrowed/ repaid

[shared capital/owners’ funds, retained profit]

Question 12

what do the net current assets show?

Answer 12

• bus’ short-term liabilities
• bus’ working capital
• current assets - current liabilities
• arguably most imp part)

Question 13

what do the net assets show?

Answer 13

how much bus is worth

total assets + net current assets

Question 14

3 non-current liabilities

Answer 14

mortgage, long-term loan, debenture

Question 15

2 current liabilities

Answer 15

overdraft, trade payables

Question 16

what is excluded from the capital employed

Answer 16

total equity