Chapter 1: The Balance Sheet

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Define the term 'Asset'
An asset is a resource that is owned by a business
1 of 7
Explain why Non-Current Assets are valued at cost in the b/s
Incase the business ever wants to sell one of their assets
2 of 7
Define the term 'Liability'
A liability is a resource that is owed by a business
3 of 7
Define 'Trade Recievables'
People that owe money to a business, because they are customers that have not paid for the goods/services provided
4 of 7
Define 'Trade Payables'
People which the business owes money to, because they have supplied goods/services that the business has received but have not yet paid for
5 of 7
Explain why a balance sheet must always balance
Because the money invested in the business must still be in the business somewhere
6 of 7
Explain why Capital is shown as a liability in the b/s
Because capital is what the business is owing to the owner
7 of 7

Other cards in this set

Card 2

Front

Incase the business ever wants to sell one of their assets

Back

Explain why Non-Current Assets are valued at cost in the b/s

Card 3

Front

A liability is a resource that is owed by a business

Back

Preview of the back of card 3

Card 4

Front

People that owe money to a business, because they are customers that have not paid for the goods/services provided

Back

Preview of the back of card 4

Card 5

Front

People which the business owes money to, because they have supplied goods/services that the business has received but have not yet paid for

Back

Preview of the back of card 5
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