Balance Sheets

Question 1

What is the definition of a balance sheet

Answer 1

It shows the financial position at a point in time

Question 2

How does a balance sheet help a business

Answer 2

It show the business how much they are worth and what they own and also what they owe to others

Question 3

Heat does the tip half of a balance sheet show

Answer 3

What the business is doing with its money

Question 4

What does the bottom half of a balance sheet show

Answer 4

Where the bussiness got its money from

Question 5

What is the definition of assets

Answer 5

Anything Owned by the business

Question 6

What is a fixed asset

Answer 6

Assets that will last for MORE THAN ONE YEAR.

Question 7

Give an example of fixed asset

Answer 7

Equipment

Machinery

Property

Fixtures and fittings

Vehicles

Question 8

What is a current asset

Answer 8

Assets that are owned by a business and will be USED WITHIN ONE YEAR

Question 9

Give an example of a current asset

Answer 9

Stock

People who owe the business money

Cash in the bank

Question 10

What is a depreciation

Answer 10

The loss in a valued of an asset over time

Question 11

What two elements must balance on the balance sheet

Answer 11

Net assets and capital employed

Question 12

What are current liabilities

Answer 12

Long term debts which the company owes TO BE PAID AFTER ONE YEAR

Question 13

Give an example of a current liability

Answer 13

Creditors ( people of other business that the business owes money to )

Eg suppliers , overdraft

Question 14

What are long term liabilities

Answer 14

Long term debts which the company owes

TO BE OAID AFTER ONE YEAR

Question 15

Give an example of a long term liability

Answer 15

Bank loans

Mortgage

Question 16

What is the definition of working Capital

Answer 16

The amount of capital / money available to pay for the day to day of the business

Question 17

What is a working capital also known as

Answer 17

Net current assets

Question 18

How do u calculate working capital

Answer 18

Current assets - current liabilities

Question 19

What does it mean if the Business has good working capital

Answer 19

The business can cover its costs and survive in a crises

Question 20

What does it mean if the business has bad working capital

Answer 20

The business can’t pay day to day expenses and may get into financial difficulties

Question 21

How do u calculate net assets

Answer 21

Net current assets + fixed assets

Or

Net current assets - non current liabilities

Question 22

What is the definition of capital employed

Answer 22

This the long term and permanent capital of the business ( capital is the money invested in the business to generate revenue )

Question 23

Give an example of an internal source of capital

Answer 23

Cash help by the business , retained profits , owners funds

Question 24

Give and expand of an external source of capital

Answer 24

Mortgage , bank loan , leasing , investors a , shareholders , hire Bouchard , grands , overdraft , credit cards