Sessions 2,3,4

Question 1

Statement of financial position known as

Answer 1

Balance sheet

Question 2

Components of SFP

Answer 2

Assets
Current assets
Non current assets

Equity and liabilities
Equity
Non current liabilities
Current liabilities

Question 3

What does the balance sheet/ SFP show?

Answer 3

Accumulated wealth of a business at a particular date by end of period

Question 4

Equation for SFP

Answer 4

Assets = Capital (Equity) + liabilities

Question 5

Non current assets

Answer 5

Land buildings
Property
Fixtures and fittings
Motor vehicles
Goodwill
Parents and trademarks

Question 6

Current assets

Answer 6

Trade receivables
Inventories
Cash
Investments
Prepayments

Question 7

Non current liabilities

Answer 7

Long term borrowing
Long term loans

Question 8

Current liabilities

Answer 8

Trade payables
Short term borrowing
Short term loans

Question 9

What do we do with profit and drawings?

Answer 9

Equity + profit - drawings

Question 10

Accounting conventions underpinning the SFP

Answer 10

Historical cost
Monetary stability
Dual aspect
Money measurement
Business entry convention
Objectivity