A formal financial document that summarises the net worth of a business at at given point in time by lookking at what the business owns (assets) and what it owes (liabilities and equity). Liabilities must equal assets.
1 of 15
Assets
Items of value owned by a business.
2 of 15
Non-current assets
Otherwise known as fixed assets. These are likely to be kept by the business for more than one year eg-vehicles, buildings and machinery.
3 of 15
Current assets
These are likely to be turned into cash with a year. Examples include- cash and cash equivalents, inventories and receivables.
4 of 15
Tangible assets
These are assets that have a physical existence eg- machinery and stock
5 of 15
Intangible assets
These are assets that do not take a physical form eg- patents, brand names, copyrights.
6 of 15
Liabilities
Money a business owes, ie- debts
7 of 15
Non-current liabilities
Debts that the business has more than one year to repay. e.g-bank loans and mortgages.
8 of 15
Current liabilites
Debts that a business may have to repay within one year. eg-overdraft and accounts payable
9 of 15
Total equity
Total amount of money used by the business obtained from share capital and retained profit
10 of 15
TOTAL ASSETS=
TOTAL LIABILITIES
11 of 15
TOTAL ASSETS=
CURRENT ASSETS+ NON-CURRENT ASSETS
12 of 15
TOTAL LIABILITIES=
TOTAL EQUITY+(CURRENT LIABILITIES+NON-CURRENT LIABILITIES)
13 of 15
Why does the Balance Sheet balance?
1. Because assets are always equal to liabilities
14 of 15
Why does the Balance Sheet balance?
1. Because assets are always equal to liabilities
15 of 15
Other cards in this set
Card 2
Front
Items of value owned by a business.
Back
Assets
Card 3
Front
Otherwise known as fixed assets. These are likely to be kept by the business for more than one year eg-vehicles, buildings and machinery.
Back
Card 4
Front
These are likely to be turned into cash with a year. Examples include- cash and cash equivalents, inventories and receivables.
Back
Card 5
Front
These are assets that have a physical existence eg- machinery and stock
Comments
No comments have yet been made