Statements of Financial position Flashcards
What does the statement of financial position record?
Where the business got its money from, and what it has done with it.
What are Fixed Assets?
Assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment.
What are Current assets?
Resources a business owns and expects to convert into cash or use within one year.
What is the increasing order of liquidity of Current assets?
Stock, Debtors and Cash
What is stock?
Includes raw materials and finished products that the firm has spent its money on but which has not yet been sold.
What are debtors?
Refers to the value of products sold that have not yet been paid for by customers.
What are current liabilites?
Short-term financial obligations company expects to pay within one year
What is the Net current assets figure?
What you get when you subtract those current liabilites from the current assets.
What is Share Capital?
The money put into the business when shares were originally issued.
What is a Long-term liability?
Debts that will take more than one year to repay.
What is Capital employed?
What you get when you add shareholders’ funds to long-term liabilities.
