chapter 26: statement of financial position Flashcards
1
Q
define statement of financial position/ balance sheet
A
a statement which shows the position of the business on a specific date
2
Q
what is the importance of the statement of financial position?
A
it has the summary of all assets, owner’s equity accounts and liabilities at a specific date
3
Q
how do you get the capital employed?
A
CAPITAL EMPLOYED= OWNER’S EQUITY + (NON- CURRENT LIABILITIES)
4
Q
how do you get owner’s equity?
A
OWNER’S EQUITY = CAPITAL + NET PROFIT(-NET LOSS) - DRAWINGS
5
Q
how do you get employement of capital?
A
BOOK VALUE OF (NON- CURRENT ASSETS) + INVESTMENTS + WORKING CAPITAL
6
Q
how do you get working capital?
A
CURRENT ASSETS - CURRENT LIABILITIES
