Ch 3.4 Balance Sheet Flashcards
Statements of FInancial Position Components
Statement of financial position components (balance sheet)
non current assests
current assets
total assets
current liabilities
non current liabilities
total liabilities
net assets
equity
total equity
non current assets
fixed assests, long term assets that last in a business longer than 12 months, purchased not to resale
current assets
items of value owned by the business that are readily converted in to cahs (ex: cash debtors, stock)
total assets
non current assets + current assets (assets are organized from most to least liquid or vice versa)
current liabilities
funds a firm owes to individuals or organizations that should be paid within 12 months (bank overdrafts, creditors and short term loans)
non current liabilities
funds a firm owes to individuals/organization that are payable over 12 months (long term loans, mortgages, borrowings)
total liabilities
current liabilities + non current liabilities
net assets
total assets - total liabilities
total equity
share capital retained earnings
relationship between net assets and equity
must balance
unless theres issues with recording data such as not all debtors paid
