Balance Sheets

Question 1

Current Asset

Answer 1

items which the business can easily turn into cash - liquid assets. e.g cash, receivables + inventory

Question 2

What are liquid assets?

Answer 2

current assets

Question 3

another term for receivables

Answer 3

debtors

Question 4

Non Current assets

Answer 4

Assets that are not intended to be turned into cash, purchases which it uses over long periods of time. e.g property, equipment + machinery

Question 5

what are fixed assets?

Answer 5

non-current assets

Question 6

Goodwill

Answer 6

Goodwill is a non-current asset. it is an intangible asset that is associated with the purchase of another company. It represents the value that competitive advantage that acquiring the company has given the business.

Question 7

Total Assets

Answer 7

current assets + non-current assets

Question 8

Current Liabilities

Answer 8

debts of the business that must be paid within the next 12 months e.g overdrafts or payables

Question 9

another term for payable?

Answer 9

creditors

Question 10

Non-current liabilities

Answer 10

Money owed by the business for more than one year e.g loans + mortgages

Question 11

what are creditors?

Answer 11

payables

Question 12

what are debtors?

Answer 12

receivables

Question 13

what combines to make total equity?

Answer 13

retained profits, share capital, reserves etc

Question 14

what must total equity do?

Answer 14

balance with net assets

Question 15

how to calculate net current assets?

Answer 15

current assets - current liabilities

Question 16

another name for net current assets?

Answer 16

working capital or liquidity

Question 17

another name for liquidity?

Answer 17

working capital or net current assets

Question 18

how to calculate working capital?

Answer 18

current assets - current liabilities

Question 19

what are net current assets used to find?

Answer 19

if a business can operate in the short term - is it liquid?

Question 20

what are total assets?

Answer 20

what the business has spent its money on

Question 21

how to calculate total assets?

Answer 21

current assets + non-current assets

Question 22

how to calculate net assets?

Answer 22

total assets - total liabilities

Question 23

what are net assets?

Answer 23

the top half of the balance sheet, the higher the better. It is what a company is worth and what it has spent its money on.

Question 24

what is total equity?

Answer 24

the second half of the balance sheet, where the money has come from. Must be equal with net assets