Statement of financial position

Question 1

what is statement of financial position

Answer 1

shows a business’s net worth
at a particular point in time and is usually produced at the end of the financial year.

It shows everything that the business owns (assets) and everything the business owes
(liabilities).

Question 2

what are examples of non current assets

Answer 2

Tangible (something that can be physically touched)

Premises

Vehicles

Fixtures and Fittings

Intangible (something that cannot be touched)

Patents

Goodwill

Branding

Copyrights

Question 3

what are current assets

Answer 3

all the assets of a company that are expected to be sold or used as a result of standard business
operations within the current year.

Current assets include:

Cash in Hand

Cash in the Bank

Inventories

Trade receivables (people that
owe the business money)

Question 4

what are current liability

Answer 4

debts that the business owes
that need repaying in under one year.

Question 5

working capital

Answer 5

current assets - current liabilities

The higher the working capital is the more it shows how easily the business can pay back its
short term debts.

Question 6

what are non current liabilities

Answer 6

long-term debts that need to be paid back in more than one years time.

Question 7

what is capital employed

Answer 7

capital that has been used to finance the business.