Statement of financial position Flashcards
What is statement of financial
Formal financial document summarising net worth at a given point in time
Balances net assets with total equity
What happens to tangible non current assets on the statement of financial position
They are depreciated to show the net book value
What is amortisation
Reducing the value of an intangible asset
What are net current assets/liabilities
Businesses ability to meet short term debts and day to day expenses
What are non current liabilities
Debts that the business repays over more than one year e.g bank loans/mortgages
What are net assets
Businesses net worth at a point in time
What is opening capital
Money tied up in the business at the start of the trading period
Includes owners capital/retained profit from previous years
What is transfer of profit/loss
Financial outcome for this year
What are drawings
Money taken out of the business by the owner
What is closing capital
Capital employed figure for the year
How does depreciation affect the value of a non current asset in the statement of financial position
Lowers the net book value
