Purpose of a Statement Financial Position

Question 1

What is the purpose of a financial Statement of Position

Answer 1

Purpose
Achieved
To measure Assets, Liabilities and Equity at one point in time for the (insert name of the Business here).
Merit
This allows (insert the user name here) to make decisions about (make up a decision relating to Assets, Liabilities or Equity related to the question).

Question 2

What are the Limitation

Answer 2

Limitations

Assets value are recorded at Historical Cost so market valuation may have changed and the asset maybe either under or over stated.

Accumulated Depreciation and Allowance for Doubtful Debts are based on estimates

Does not show non-financial information. E.g. the quality and age of assets, the ability of staff.

Question 3

Components

Answer 3

Components

o	Current Assets
o	Non Current Assets
o	Plant Property Equipment
o	Investments
o	Intangible 
o	Current Liabilities
o	Non Current Liabilities
o	Owners Equity