Statement of Financial Position Flashcards
What are the terms used in a statement of financial position?
- Non-current assets
- Current assets
- Current liabilities
- Working equity
- Net assets employed
- Non-current liabilities
- Net assets
- Equity & Reserves
What is the definition of non-current assets?
Items owned for a period of more than one year.
What is the definition current assets?
Items owned for a period of less than one year.
What is the definition current liabilities?
Items owed for a period of less than one year.
What is the definition working equity?
The ability to pay short-term debts.
Calculated by:
current assets - current liabilities.
What is the definition net assets employed?
This is the value of non-current assets added to the working equity figure.
Calculated by:
non-current assets +/- working equity
What is the definition of Equity & Reserves?
This shows how the business has been financed, e.g. the initial investment in the business (equity shares, etc), retained profits, etc. It should add up to the exact value of total net assets.
