Financial Situation

Question 1

Balance sheet

Answer 1

Assets = Liabilities + Equity
Shows the financial situation of the company

Question 2

Accounts payable

Answer 2

Is the amount of money that a client will have to pay back for a supplier for goods sold on credit

Question 3

Accounts receivable

Answer 3

Is the amount of money that is owed by customers for goods they purchased on credit

Question 4

Overheads

Answer 4

Indirect costs

Question 5

Turnover

Answer 5

Amount of money you receive from sales

Question 6

Profit and loss account

Answer 6

Revenues and Expenditure (costs and expenses)

Question 7

Cash fliw statement

Answer 7

Shows the source and use of a company’s funds
Shows movement of funds for a period of a time

Question 8

AP VS AR

Answer 8

Both are current accounts
AP: means the amount of money that a client will have to pay back for a supplier for good sold on credit
While AR means the amount of money that isowed by customers for goods and services they purchased on credit

Question 9

Turnover and Income

Answer 9

Both indicates the company’s performance
Turnover: is the money tou receive from sales
Income: is the money you receive from the whole business

Question 10

Insolvency and bankruptcy

Answer 10

Both are subsiquent to pne another
Insolvency: shows the financial situation of a company where what you owe exceeds what you own
While Bankrupty is a legal situation where creditors claim their debts from the insolvent company, the company’s assets are seized by the court

Question 11

Equity Vs Dividend

Answer 11

Equity refers to the ownership interest of shareholders in a company
Dividends is the amount of money that shareholders receive from investment