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Questions and Answers
Match the terms with their definitions:
Assets = Resources used or owned by a business Liabilities = Debts of the business Capital = Finance provided by the owners Liquidity = Ease of selling assets for cash
Match the types of assets with their descriptions:
Non-current assets = Assets that last for more than one year Current assets = Assets likely to be changed into cash within a year Trade receivables = Amounts owed to a company by its customers Net current assets = Current assets minus current liabilities
Match the types of liabilities with their characteristics:
Current liabilities = Debts to be repaid within a year Non-current liabilities = Debts payable after 12 months Net assets = Value after subtracting liabilities from assets Capital = Owner's investment in the business
Match the financial terms with their functions:
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Match the terms with their categories:
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Study Notes
Statement of Financial Position
- A snapshot of a business's financial health at a specific point in time
- Also known as the balance sheet
- Shows a business's assets, liabilities, and capital
Assets
- Resources owned or controlled by a business
- Examples include cash, inventory, equipment, and machinery
Liabilities
- Debts owed by a business
- Provide a source of funds
- Can be current (due within a year) or non-current (due after a year)
Capital
- Finance provided by the owners of the business
Non-current Assets
- Assets expected to last longer than one year
Current Assets
- Assets expected to be converted into cash within a year
- Liquid assets are those that are easily turned into cash
Trade Receivables
- Money owed to a company by its customers
Current Liabilities
- Debts that must be repaid within one year
Net Current Assets
- The difference between current assets and current liabilities
- Also known as working capital
- A measure of a company's ability to meet its short-term financial obligations
Non-current Liabilities
- Debts that are payable after 12 months
Net Assets
- The total value of assets minus the total value of liabilities
- Found at the bottom of the first part of the balance sheet
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Description
Test your knowledge of the Statement of Financial Position, also known as the balance sheet. This quiz covers essential concepts including assets, liabilities, and capital. Challenge yourself to understand both current and non-current assets, as well as working capital.
