Part C Flashcards
What is a trial balance
It is a list of all ledger accounts for a business and their balances at a point in time. The credit and debit sides must equal.
What is a statement of financial position
A financial statement that summarises a business’s assets, liabilities and owners equity on a particular date. There are two formats this can be represented in.
What are the two formats of SFP
T Account Ledger: A = L+ OE
Narrative: A - L (net assets) = OE
What is the format of a T Account Ledger SFP
Statement of Fin Pos
as at 30 June 2024
ASSETS LIABILITIES
Bank 500 Loan 250
OWNERS EQUITY
Capital 250
$500 $500
What is the format of a Narrative SFP
Statement of Fin Pos
as at 30 June 2024
ASSETS
Bank 500 | 500
LESS LIABILITIES
Loan 250 | 250
NET ASSETS | $250
OWNERS EQUITY
Capital | $250
What is a profit and loss statement
a financial statement that summarizes the business’s revenues, costs, and expenses during a specified period.
Revenues - Less Expenses = Net profit
What does a profit and loss statement look like
Profit and Loss Statement
as at 30 June 2024
REVENUES
Sales 1000
Interest 50 | 1050
LESS EXPENSES
Electricity 100
Wages 500 | 600
NET PROFIT | $450
What is net profit
A business’s total earnings after subtracting all expenses.
What is net assets
The value of a company’s assets minus its liabilities.
Cash in hand? Cash at Bank?
Cash at bank is the cash you have in your bank account and cash in hand is what you have at the store, cash that you have on your person.
what is the name that is given to the order the assets are in?
Liquidity
What is the Liquidity order
Cash in hand
Cash at bank
A/cs Receivable
Inventories
Furniture
Buildings
Land
What is another name for inventories?
Stock, Goods
Balance b/d
Brought down, it has been carried forward from the previous accounting period
Balance c/d
Carried down, the one that is going to be carried down to the next, worked out with the leftover money in the debit
