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Questions and Answers
Which of the following items is classified as an asset on the balance sheet?
Which of the following items is classified as an asset on the balance sheet?
- Debtors (correct)
- Capital
- Ram
- Creditors
What is the primary purpose of a balance sheet?
What is the primary purpose of a balance sheet?
- To summarize a company's operational efficiency.
- To present a company's financial position at a specific point in time. (correct)
- To detail a company's cash flow activities.
- To report a company's income over a period of time.
Based on the provided balance sheet, what is the total value of the company's buildings and plant & machinery?
Based on the provided balance sheet, what is the total value of the company's buildings and plant & machinery?
- $31,500
- $78,000
- $60,000
- $91,500 (correct)
What is the implication of negative values for 'Ram' and 'Chandra' under the liabilities section?
What is the implication of negative values for 'Ram' and 'Chandra' under the liabilities section?
If the 'Stock' value increased by $5,000 and the 'Creditors' value decreased by $2,000, what would be the net change in total assets and total liabilities respectively, assuming all other values remain constant?
If the 'Stock' value increased by $5,000 and the 'Creditors' value decreased by $2,000, what would be the net change in total assets and total liabilities respectively, assuming all other values remain constant?
Flashcards
Balance Sheet
Balance Sheet
A document summarizing a company's financial position at a specific date.
Liabilities
Liabilities
Amounts a company owes to external parties, showing its obligations.
Assets
Assets
Resources owned by a company that have economic value.
Total Assets
Total Assets
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Total Liabilities
Total Liabilities
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Study Notes
Balance Sheet
-
Liabilities:
- Capital: 134677
- Ram: 22338
- Chandra: 15000
- Creditors: 65900
- Total Liabilities: 72015
-
Assets:
- Building: 60000
- Plant & Machinery: 31500
- Stock: 18000
- Debtors: 9215
- Cash at Bank: (1200 + 15000 + 19200) = 35300
- Total Assets: 137915
-
Summary:
- The balance sheet presents a snapshot of the financial position of a business by detailing its assets, liabilities, and equity at a specific point in time.
- The total Liabilities and Total Assets match, indicating the balance sheet is balanced.
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