Balance Sheets

Question 1

What is a Balance sheet ?

Answer 1

This is a financial statement that show the assets,liabilities and capital of a business.

Question 2

What are the components of a balance sheet ?

Answer 2

Assets
Liabilities
Capital

Question 3

What are the types of Assets ?

Answer 3

Current assets-These are long term liabilities
expected to be converted into cash or used up within one accounting
Fixed/Non-Current assets-These are long term liabilities not expected to be converted into cash or not used up within one accounting year.

Question 4

What are the types liabilities

Answer 4

Currents liabilities-a company’s short term debts that must be paid within one year
Long-term liabilities-a company’s short term debts the are not due to be paid within one year

Question 5

Examples of these Components

Answer 5

Current Assets-cash,accounts receivable,Debtors etc
Fixed/Non currents assets- long-term investment,equipment etc
Current liabilities-creditors ,commissions due
Long term/Non- currents liabilities-mortgage,bank loan etc

Question 6

What is capital?

Answer 6

This is the money or assets that a business uses to operate, grow, and earn income

Question 7

How do you calculate working capital?

Answer 7

WC=CA-CL