Unit 22

Question 1

Q1. What is a statement of financial position?

Answer 1

A1. An accounting statement that records assets.

Question 2

Q2. What are assets?

Answer 2

A2. Resources owned by the business.

Question 3

Q3. What are liabilities?

Answer 3

A3. Debts that the business needs to pay.

Question 4

Q4. What is a non-current asset?

Answer 4

A4. Resources the business owns that are expected to be used for more than a year.

Question 5

Q5. What is a current asset?

Answer 5

A5. Resources the business owns that are expected to be used within the year.

Question 6

Q6. What are trade receivables?

Answer 6

A6. The amount of money owed to the business by customers.

Question 7

Q7. What are trade payables?

Answer 7

A7. The amount a business owes to another business.

Question 8

Q8. What are non-current liabilities?

Answer 8

A8. Debts the business expects to pay before the end of the year.

Question 9

Q10. What is shareholders’ equity?

Answer 9

A10. The portion of a company’s assets that an owner can claim.

Question 10

Q9. What is owner’s equity?

Answer 10

A9. The amount the business owes to shareholders.

Question 11

Q.10 What are the methods of interpreting statement of financial position?

Answer 11

A.10
(1) The assets owned by the business.
(2) What the business owes.
(3) What the business is owed.
(4) How the business finances its activities.

Question 12

Q.11 What are the types of liabilities?

Answer 12

A.11
1) Current liabilities.
2) Non-current liabilities.
3) Owner’s equity.